Rival settlement system could service complete policy and claims process
Concerns have been raised about the long-term future of Lloyd's central bureau after leading sources warned of a growing threat from managing agent consortium, G6.
It is understood G6 could potentially build an electronic system which would effectively be an accounting and settlement system for the Lloyd's market to rival Xchanging Insurance Services' (XIS) central bureau.
In total, Xchanging processes £62bn of insurance business annually for the London insurance market. But an industry source told Insurance Times that work being done by the leading group of managing agents was causing concern for XIS.
The source said: "The G6 initiative could threaten the future of the bureau.
"The ultimate solution, which may mean G6 servicing the whole process from new business, endorsements, claims and payments, could all be done outside the bureau in future."
It could come as a blow to XIS which has monopolised the Lloyd's broker and underwriting service provider market since 2000.
The recent successes of G6 will pile further pressure on the bureau, with news that four separate managing agents have been invited to join the peer-to-peer implementation group to test the system.
This follows confirmation that Hiscox alone has processed £20m in premium income through the peer-to-peer system, which by the end of the year will be used by another three brokers, JLT, Miller and Guy Carpenter.
Sue Langley, chairman of G6 and chief operating officer at Hiscox, admitted that the group's progress does raise certain questions.
But she said: "These are positive question marks. As the market changes, we will require a different set of services.
"Some people believe there should be only one solution, but a monopoly is not good for the market. Change is easier to achieve if there is competition."
Xchanging was unavailable for comment as IT went to press.