Lloyd's Market Board has selected Xchanging as its preferred partner for the joint venture ownership and outsourced management of Lloyd's Claims Office (LCO).

The technology specialist company has already been chosen to help reduce administration costs in the London Market. It was the key partner for establishing Ins-sure Services, which brought together the Lloyd's Policy Signing Office (LPSO) and the International Underwriting Association's (IUA) London Processing Centre (LPC).

Xchanging was selected from a shortlist of nine potential partners.

It is hoped the agreement will be completed by the end of the year, following legal discussions and investigations.

The decision to put LCO on a commercial footing was announced last year.

Lloyd's believes that claims processing, adjusting and recoveries will improve if the LCO's specialist services are structured like a business, rather than a not-for-profit centre.

Potential partners were assessed on broad criteria, which included the way they could improve business, the reaction of the existing customer base and how management and staff would fare.

They were also asked with what stake Lloyd's would be left and how much value would it receive.