(Reuters) — Lloyd’s of London on Thursday said insurance brokers who refuse to digitalize their business in 2019 could be thrown out of the centuries-old market.
After a £2 billion ($2.52 billion) loss last year, Lloyd’s wants to make its marketplace for 80-plus syndicates more competitive, with going electronic core to cutting costs.
Much of the business is still conducted face to face with underwriters and brokers using briefcases or suitcases to carry paperwork around the building.
Lloyd’s introduced its electronic processing system in July 2016, but it has been unpopular with smaller brokers and underwriters.
It set new quote targets and a broker requirement on Thursday to speed up adoption.
Each syndicate will be required to have written no less than 40% of its risks using the electronic system in the first quarter of 2019, rising to 50% in the second quarter.
Lloyd’s said brokers on its market will have to connect to the system by June 2019.
“However, in the event that a Lloyd’s broker does not comply with the requirement it would be open to the board, depending on the circumstances of the case, to disapply the requirement, allow further time for compliance, or to deregister the broker as a Lloyd’s broker,” Lloyd’s said in a statement.
By the end of November, 29.8% of “in scope” contracts were placed electronically, just shy of a 30% target.
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