Insurance and reinsurance marketplace Lloyd’s of London has outlined a set of updated targets for its electronic placement mandate, which will require syndicates to progressively write more of their risks digitally.
In the third quarter of 2019, each syndicate will be required to have written no less than 60% of its risks using a recognised electronic placement system, with the target rising to 70% in Q4.
Lloyd’s originally introduced the mandate in March 2018, with initial targets requiring syndicates to write 10% of their risks electronically by Q2 2018, 20% by Q3 and 30% by Q4.
The mandate was implemented following discussions with members of the Lloyd’s market, the Lloyd’s Market Association (LMA), the London & International Brokers’ Association (LIIBA) and the International Underwriting Association (IUA).
If this year’s targets are met, it suggests the amount of risks written in the Lloyd’s market using electronic placements will have more than doubled in just one year.
Lloyd’s reported that 80% of syndicates have met or exceeded the targets so far and have therefore qualified for a rebate on their annual subscriptions, which was offered as a financial incentive for compliance.
By contrast, syndicates that fail to meet their targets are charged additional fees, the proceeds of which are contributed to the costs of modernising market systems and processes.
“Electronic placement allows Lloyd’s to simplify access and lower the costs of doing business, two objectives that are central to our strategy to build the future at Lloyd’s,” said Jennifer Rigby, Chief Operating Officer (COO) at Lloyd’s.
“We have exceeded our targets every quarter so far, which is excellent news and provides further evidence that we are already reshaping the market into a more future-focused platform,” she added.
Placing Platform Limited (PPL), the London Market Group’s electronic placement system, announced yesterday that it has continued to see an increase in adoption rates, with 250,000 firm orders and 69,411 risks bound on the platform to date.