There are clear indications that the London Market’s support for electronic placement, which supports face-to-face negotiation, is gaining momentum.
More than 15,000 risks have been placed through Placing Platform Limited (PPL), the market-backed electronic placement platform, and firms are demonstrating their support for PPL with PPL ready box signs and email signatures (version 1 and version 2).
To help focus the market on modernisation, Lloyd’s shared greater detail on the electronic placement mandate on 21 March 2018. The mandate has the support of the LMA, the IUA and LIIBA.
Christopher Croft, Chief Executive of LIIBA, commented: “We are encouraged by the rates of adoption thus far and the clear evidence that the latest version of the platform provides a sound basis for the placement of London market risks. Our desire now is to see PPL become the predominant method of trading in our market by 1st January 2019. We believe this mirrors the desire of the Board of IUA and LMA.”
The IUA has established a code of conduct for the use of electronic trading by its member companies in the London Market. Malcolm Newman, chairman of the IUA, said: “Many IUA companies are already working to introduce electronic placement into their business and are strong supporters of market-wide modernisation efforts.
“For PPL to be truly successful and deliver its expected efficiency benefits, this adoption process needs to accelerate throughout the London Market across multiple business lines.”
Lloyd’s Market Association Chief Executive, David Gittings, added: “The LMA Board supports the introduction of a mandate to encourage electronic placement across the London Market, and it is pleased that the recommendations it made earlier in the year to encourage adoption are being taken forward.”
Market firms’ support for the mandate of electronic placement is strong. Dominic Christian, Global Chairman of Aon Benfield explained: “Aon welcome the announcement of the Lloyds’ mandate for electronic placement and will do everything we can to help drive adoption.
“Carriers and brokers alike should be proud that they have found a way to unite behind a common cause – one which can play a key role in keeping the London Market relevant and at the forefront of the global insurance industry.”
Bronek Masojada, Chief Executive of Hiscox added: “Electronic placement is a key component to the London Market’s response to the precipice that it is facing regarding digitalisation.
“If successful, electronic placement will allow us to get better data, trade more effectively and support face to face negotiation in the market. Whilst PPL is not perfect, we can’t afford to wait on the side lines, we all need to get involved and get better at using it at submission to truly unlock the value it holds.
“Electronic placement is a huge opportunity for the London Market and the mandate will help unite the market to move forward together in digitalising the placement process.”