London’s electronic placing platform exceeded its target of 30 percent of in-scope risks during the fourth quarter of 2018, according to the board of Placing Platform Ltd. (PPL).
Lloyd’s syndicates accepted 39 percent of in-scope risks, with 76 percent of syndicates meeting or exceeding the 30 percent target for the fourth quarter, said PPL.
At the same time, those company market members of the International Underwriting Association (IUA) that participate in PPL, accepted an average of 41 percent of in-scope risks during the fourth quarter, with 53 percent of IUA companies meeting or exceeding the target, said the PPL board.
As part of the carrot-and-stick approach to attract users to PPL, Lloyd’s for the first time will pay partial rebates on annual subscriptions for 2018 in the first quarter of 2019. The rebates will be received by 63 Lloyd’s syndicates who have exceeded the targets for the third and fourth quarters of 2018 (20 and 30 percent, respectively).
The seven syndicates that failed to reach the third and fourth quarter targets will be charged additional fees for their subscriptions, explained a PPL representative.
The total net amount paid in rebates (minus the additional charges) was £12 million ($15.5 million), PPL said.
Electronic trading is a core component of the London market’s Target Operating Model, or TOM, which aims to make it easier to transact insurance in the London market.
While Lloyd’s syndicates are mandated to reach the PPL targets, participation by the London company market is not mandated and will not receive financial incentives or fines. Nevertheless, IUA members that participate in PPL electronic placements have risen from 29 percent of in-scope risks during the third quarter to 41 percent in the fourth quarter.
PPL said the top five Lloyd’s syndicates that accepted risks on the platform during the fourth quarter were:
- Beazley Syndicate 3623
- Hiscox Syndicate 3624
- Aegis Syndicate 1225
- RenaissanceRe Syndicate1458
- Asta Syndicate 5886
“The fact that both volumes and adoption have risen significantly is great news for the market as a whole,” said Shirine Khoury-Haq, Lloyd’s chief operating officer.
“I am pleased to see that Lloyd’s has again significantly exceeded its quarterly targets and that firms are being rewarded for their success with rebates on their subscriptions that represent meaningful sums of money,” he added.
“All of this is hard proof that, as a market, we are committed to making London as easier place to do business with simpler and more efficient processes, reinforcing our position as a global hub for re/insurance,” affirmed Khoury-Haq.
Bronek Masojada, chair of the PPL Board said: “This is another very strong set of numbers, demonstrating that all parts of the market have really committed time and energy to electronic placement. The fact that the market bound 37,537 risks on PPL by the end of 2018 is hard evidence that the challenge of digitalization is being taken very seriously and I would like to thank all involved for their efforts.”
“The latest figures again show that progress towards PPL adoption is at least as rapid across the London company sector as it is amongst Lloyd’s managing agents,” commented Louise Day, director of Operations at the IUA.
Day said it is significant that 43 percent of IUA’s reporting members placed half of all eligible risks on PPL in the quarter because the company market doesn’t have a mandate to place their risks on the platform. “[T]heir enthusiasm for the platform demonstrates a clear belief that it will add value to their business operations.”
Christopher Croft, CEO of London & International Insurance Brokers’ Association (LIIBA), said: “Broker adoption is critical to the carriers being able to hit their targets, and we are delighted that there are now 46 broking firms live on the platform, and that this number is growing significantly month on month.”
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