London-based RI3K has announced that by the end of this month it will expand its electronic trading platform services to certain commercial lines. The company said it will initially handle International Property, North American Property and Terrorism classes of business. RI3K plans to expand the service to a further 21 lines of business by May 2006.
The innovative system, first introduced in 2003, has heretofore been used exclusively to handle treaty and facultative reinsurance transactions. However, CEO Alex Letts is confident that the technology can be easily adapted to new uses. “The Commercial Insurance service is a mirror image of the Reinsurance service, running on the same, proven technology”, he stated. “It allows brokers to manage quotation, placement, signing-online, signing down and endorsement in a transparent, auditable electronic environment. The full data output is offered to back office systems in ACORD standard format.”
The announcement further notes: “The Commercial Insurance service will run on the same technology platform as RI3K’s Reinsurance service and will use the same log-on, interfaces, and security, and will offer the same functionalities.”
The Lloyd’s market will be the primary beneficiaries for RI3K’s platform, Letts acknowledged, although it will also be available to the entire London market. The initiative comes at a good time. Lloyd’s Kinnect project, which is also designed to provide electronic placement capabilities, remains beset by technical and other problems. In addition it has lost the presence of Nick Prettejohn, its foremost advocate at Lloyd’s, who’s leaving his position as CEO at the end of the year to join U.K. life insurer Prudential Plc (See IJ Website Oct.17).
Unfortunately several pressing concerns cannot wait for the eventual emergence of a viable electronic system. The Spitzer investigations have raised demands for greater transparency. The U.K.’s Financial Services Authority (FSA) has set next year as a deadline for assuring that the certainty of insurance contracts is assured. Lastly, the London market continues to pay far higher processing costs than its competitors, primarily due to all of the hand to hand transfers that are still being used to submit and underwrite insurance policies.
“These costs have to come down,” Letts observed. “There’s a real need for workable, saleable up front office transfer capabilities. RI3K’s platform can fill that need. “We’ve provided it for the Re’s, so we’re stepping into the breach,” he added.
He described the platform as “a consolidated service, offering insurance and reinsurance trading in one environment. It has one interchange agreement, and it’s fully compliant with ACORD, LMP and Contract Certainty requirements,” he added: “As it sits on proven, scaleable technology, we can add new classes of business almost on a daily basis. We fully expect to be ready to play our role in helping the UK market meet the FSA Contract Certainty deadline of end 2006.”
The company’s initiative still remains somewhat of a leap in the dark, as it hasn’t so far signed up anyone to use it, but Letts remains confident. “It’s working, it’s proven; it’s been built,” he said, “now they [brokers and underwriters] just have to use it. Basically it’s here, come and get it.”
Those brokers and carriers should be reassured by RI3K’s success within the reinsurance market. The company’s Website notes that as of January 2005 “a total of 1,380 reinsurance lines have been signed through the RI3K service representing gross premium estimated at over US$1 billion. Registered member companies number 146 (19 cedants, 24 brokers and 103 reinsurers) and well over 1,000 individual users have been set up with a user name, password and personal security key.”
For further information consult the Website at: www.ri3k.com.
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