Lloyd’s and the International Underwriting Association (IUA) jointly announced the selection of information technology specialist Xchanging as a partner in a joint venture which will develop and operate a unified premium processing and claims service covering the London market.
The three plan to form a jointly owned, but as yet unnamed, company which “is expected to process premiums and claims worth in excess of £20 billion ($29 billion) annually on behalf of some 220 insurance companies and Lloyd’s syndicates.” It will handle some 1.8 million accounting transactions and 13 million electronic transactions, making it one of the world’s largest insurance service operations.
Lloyd’s and the IUA’s long sought goal of unifying and modernizing the London insurance market is coming closer to reality. Lloyd’s CEO Nick Prettejohn stated that, “The new company will provide London with unified back-office processing, leading to lower costs and better service for our customers and their brokers.”
Xchanging, founded in 1999, is funded by General Atlantic Partners LLC, one of the world’s largest venture capital firms. U.S. insurance giant AIG committed a $1 billion capital investment in the company last April, and has a 5 percent stake in its managing general partner. Its stated goal is to invest in cutting edge information technology companies on a global basis.
The announcement quoted Adele Browne, Xchanging co-founder, as saying, “We are going to create a world-class provider of placement support, claims, settlement and accounting services to brokers, insurers and reinsurers.”
IUA deputy chairman Tony Medniuk said, “This initiative will take us rapidly towards the latest Internet-based generation of business-to-business processing, whilst simultaneously helping to take cost out of current procedures.”
Although the announcement gave no timetable for the establishment of the new company, Lloyd’s spokesman Adrian Beeby indicated that the signing of a letter of intent anticipated a three month period for preparing and signing the necessary agreements and contracts, and setting up the operating entity. The actual implementation of the new system should begin soon afterwards.
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