By Carolyn Cohn
LONDON (Reuters) - Lloyd's of London has dropped ambitious plans to set up its own electronic exchanges and will work with other existing platforms instead to speed up the underwriting process and cut costs, the commercial insurance market said on Thursday.
Lloyd's said last year it was planning to launch two electronic exchanges covering simple and complex insurance deals. In February it piloted the exchange for simpler insurance transactions.
The 330-year old market still mainly operates with face-to-face trading and faces competition from lower-cost rivals, though the coronavirus pandemic has forced Lloyd's participants to use more electronic trading and agree deals online.
Lloyd's no longer plans to launch its own complex risk exchange but will work with existing digital platforms already in use by the market, such as PPL, to improve digitalisation. Lloyd's bought a 40% stake in PPL earlier this year.
"Our thinking has evolved," it said in an update on its plans.
The Lloyd's market is made up of more than 90 insurance syndicate members and hundreds of brokers, and insures anything from ships to sculptures.
Lloyd's also said it would develop an "exchange of exchanges" for simpler risks, connecting existing systems used by insurers and brokers, and would update the market on this next year.
"The pandemic has demonstrated that Lloyd’s can adapt in a fast-changing environment and this has only increased our hunger to get on and make further change happen," Chairman Bruce Carnegie-Brown said in a statement.
Lloyd's plans to make other operational efficiencies over the next two years, such as automating claims processes, it said in the second report on its Future at Lloyd's strategy. It aims to cut costs for insurers and brokers by around 3%.