Kinnect’s axing linked to Lloyd’s strategic rethink
Lloyd's decision to terminate the Kinnect project came just over a week after the Corporation unveiled a new strategic plan which creates a vision of the Society being a low cost insurance platform.
In a letter to Kinnect's "customers" explaining the decision to discontinue funding for the initiative, stand-in chairman Michael Dawson said it had been concluded that the platform "was not optimal in ensuring more efficient business processes for the Lloyd's and London market".
Dawson placed the decision in the context of the strategic plan for the franchisor, as well as the more specific analysis of electronic trading options undertaken with Lloyd's director of change management and human resources Steven Haasz in recent months.
Dawson, the former Cox CEO parachuted into Kinnect last September, stated: "As set out in Lloyd's Strategic Plan, there is a clear view that the Franchisor's role going forward should be primarily on standards setting, not building infrastructure."
Instead, Dawson continued, Lloyd's would strive to work "with the market" to achieve electronic trading.
"One of the key factors leading to the closure of the platform is the changing nature of the technological landscape. In recent years, a lot of progress has been made in electronic data transfer. We are particularly encouraged by the progress made with other trading platforms and peer to peer systems," he said.
An example of such a trading platform to have progressed - as acknowledged by Dawson in an interview with The Insurance Insider - is RI3K.
Speculation has focussed on the Brit-owned electronic platform as a potential alternative to Kinnect, although reservations about conflicts of interest under its current ownership may have to be overcome to enable market-wide acceptance. Lack of market support for Kinnect appeared to be a factor in its failure despite recognition that its overall objective was desirable.
Whichever direction the market takes, Dawson was keen to highlight the support the Corporation would offer to modernise the market.
"We remain as committed to this goal today and resolutely believe in the need for electronic data transfer, however it is achieved," he said.
Lloyd's may support the drive by "keeping staff at the centre to act as an intelligent customer for the market; maintaining a watching brief of developing standards and systems; making money available to 'prime the pump' for the right market solution; and providing the Kinnect Intellectual Property to appropriate commercial organisations," Dawson explained.
He added that "every opportunity would be given to allow customers to complete transactions and/or extract data from the platform".