Exchange milestone reached

Just a year after market executives crowded into the Old Library at Lloyd’s to hear operations director Sue Langley present her vision of an IT hub for the market, the Exchange is officially “open for business”.

Lloyd’s Exchange is a simple messaging service that makes it easier to work in the London market. It allows brokers, underwriters and system providers to have a single connection point from which they can send and receive information between multiple parties using one common standard.

Easy to connect to and use, the service is already in place and run by IBM. There is already evidence that the Exchange is driving competition between suppliers with the costs of gateways, message management tools and other connection options coming down.

Exchange broken into manageable steps

For ease of adoption, implementation of the Exchange was broken down into manageable steps with managing agents, brokers and other service providers connecting via a phased approach.

“Our original objective was to have 20% of the market connected by the end of 2009. In the end we achieved 80% sign up and connection,” Langley says. “And now we are actually observing organisations transacting live messages via the service”

Langley is guardedly optimistic. “The market sees the Exchange for what it really is – a utility just like all the other tools provided in the market,” she enthuses. “It doesn’t impose a way of working on underwriters, brokers or their suppliers. It imposes the ACORD standard on messages so that everyone is talking the same language. That’s important in a subscription market.”

100% sign up to endorsements

Support for the project and its aims is evident from the market-wide support recently given for the next important step sending all endorsement messages electronically via the Exchange.

There is an impressive 100% sign-up to the endorsements pilot from Lloyd’s managing agents. Their seal of approval comes after the three biggest broking firms - Aon, Marsh and Willis - gave their backing at the end of last year.

Importantly, a total of 18 members of the International Underwriting Association have also now signed up to the endorsements pilot, including major London company market firms such as Allianz and Munich Re.

To get the endorsement pilot running, electronic endorsements from marine hull and cargo will be the main focus. This is being driven by a cross market group and if all goes according to plan other classes can be piloted.

Governance is widening

Such is the growing cross market support for the Exchange that the governance of the service is also being reviewed. “This is a market wide utility,” Langley points out. “And that’s why we’re looking at how the Exchange should be governed to ensure it is truly cross market.”

So it’s probable that the project will be overseen in future by Lloyd’s, the LMA, the IUA and the LIIBA.

Langley already has her eyes on the next steps to take, once endorsements are happily running through the Exchange. “We’re going to be looking at the other information that the market uses and determine what else should be put onto the Exchange in terms of ACORD standards,” she says.

“We want to make it easier for all Lloyd’s stakeholders to talk to each other. That can only make the market more attractive to everyone. But we will only achieve it by taking small, easy steps,” she adds.