What is the Lloyd's Exchange

What are the objectives of the Lloyd’s Exchange? What exactly is the Lloyd’s Exchange? What are the benefits to the Market in using the Lloyd’s Exchange?How will Lloyd’s provide the Lloyd’s Exchange?What will the central directory service provide?Is this a trading platform?How will the pilot work?
Who is participating in the pilot? 

What are the objectives of the Lloyd’s Exchange?

The Lloyd's Exchange is a pilot initiative to provide a simple messaging hub. It has two key aims:

• To remove the future need to maintain multiple connections with other parties and suppliers in the market

• To ensure that one standard is enforced

The ultimate aim of this initiative is that a common standard is enforced across the market that will allow the electronic exchange of standardised information throughout the insurance process.

Initially, the Lloyd’s Exchange will allow market participants to exchange risk information electronically using the common ACORD data standards. It is anticipated that business software suppliers will connect to the Exchange to offer value added services and products to the market.

With multiple choices and standards in the market developing into a 'spaghetti' model progress can be slow and costly. The Lloyd’s Exchange aims to simplify this.

Additionally, it will reduce the barriers to entry and the risk of participation for market organisations who have not yet committed to the electronic environment.

Diagram showing how the Lloyd's Exchange works

What exactly is the Lloyd’s Exchange?

The Lloyd’s Exchange has two core components.

The first is a market directory, which stores key contact information for participating organisations, that can then be searched for via the Exchange. Through this function, users can create and maintain online trading relationships.

The second main function of the Exchange is to provide a messaging hub that will allow the sending and receiving of electronic placing messages between brokers and underwriters.
 
Initially, the core - or 'skinny' -  message will be used (as defined in the ACORD Placing Implementation Guide) to support the broker placement messages and underwriter responses.  This message standard also supports attachments.

These messages will be ACORD validated and can only be exchanged with registered trading partners.

Lloyd's exchange hub

What are the benefits to the Market in using the Lloyd’s Exchange?

The Lloyd’s Exchange is not designed to change the established way in which business is placed, but to support the electronic exchange of information in a standardised form. 

The Exchange is intended to sit alongside and assist the ‘face to face’ process that is integral to the Lloyd’s model.

The key short-term benefits are:

• With the growth of the number of suppliers and systems developing in the market, the Lloyd's Exchange will simplify the situation - as participants only have to maintain one connection to a central Exchange rather than multiple connections to multiple organisations.

• All data will be standardised to an agreed ACORD version, making it easier to use the data across the market in a consistent way. 

In the long term, the key benefit is the reduction of the need for carriers and brokers to re-key and move paper throughout the whole process.

Those participants who already have gateways and established peer-to-peer trading relationships may choose to continue to operate as they do now. However, through a single connection to the Lloyd’s Exchange the participant would be able to exchange messages with a multiple number of trading partners also connected to the service.

How will Lloyd’s provide the Lloyd’s Exchange?

Lloyd's conducted a tender process to select a vendor from whom they will procure the service to deliver the Lloyd’s Exchange.

Through an externally reviewed and internally audited tender process, an initial list of 26 potential suppliers was taken through to the point at which IBM were chosen to deliver the pilot.

The solution is based on a tried and tested service purchased from IBM, rather than designed from scratch.

Lloyd’s is now working in partnership with IBM to bring the Lloyd’s Exchange to the market.

What will the central directory service provide?

The central directory holds and displays lists of brokers, Managing Agents and IUA companies at the organisation level signed up to using the Lloyd's Exchange.
Data held in directory will be searchable, and responsibility for keeping ‘profile’ information up to date will rest with the organisation.

Organisations will be required to request permission from other organisations to send and receive messages between one another

Is this a trading platform?

The Lloyd’s Exchange is not a trading platform. A trading platform provides extensive functionality which makes it central to the trading process (i.e. trading cannot continue without the platform in place). The Lloyd’s Exchange is simply a messaging hub, designed to provide a single connection point allowing the exchange of ACORD data messages.

How will the pilot work?

For further information about the pilot, please see:

The Pilot
Who is participating in the pilot?

On the carrier side, strong interest has been received from over half of the Lloyd's market by capacity. The London company market will also be represented in the pilot. The LMA and IUA have both declared full public support for the initiative. 

Additionally, Lloyd's is meeting firms from the broker community. LIIBA fully supports the Lloyd’s Exchange and is actively encouraging participation amongst its members.

For a specific list of pilot phase 1 participants please see:

The Pilot
Finally, Lloyd's has been in communication with a significant number of IT service providers and software houses in the market to ensure they are prepared for this initiative.  These technology suppliers, as well as external trading platforms (such as RI3K, TIW etc), will also be participating in the pilot.
Last updated on 07 Sep 2009