LONDON (Reuters) - Lloyd’s of London said on Thursday insurance brokers who refuse to digitalize their business in 2019 could be thrown out of the centuries-old market, which covers risks from oil rigs to soccer stars’ legs.
It also named Sonja Rottiers chief executive of its new European Union hub in Brussels.
After a 2 billion pound 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 percent of its risks using the electronic system in the first quarter of 2019, rising to 50 percent 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 percent of “in scope” contracts were placed electronically, just shy of a 30 percent target.
The insurance market has said it would launch a Brussels unit to enable it to continue serving its customers in the European Economic Area after Britain leaves the bloc next March.
Rottiers, who has worked for more than 30 years with the Belgium’s financial services industry, was most recently a board member of ING Belgium and Kinepolis NV Group (KIPO.BR), the company said.
The marketplace also appointed Michel Flamée as chairman of the new unit, it said.
Additional reporting by Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru; Editing by Anil D'Silva and David Evans