Lloyd's itself is a unique microcosm of this coexistence of the old and the modern. Lloyd's is as relevant today as ever before with operations expanding across the globe (China last year, Brazil just announced).
However, much of Lloyd's announced £15.95b 2008 capacity will be transacted by paper. See my December 2007 post (here) for more background. Lloyd's, other London underwriters and brokers all process through the "bureau" in a joint venture with Xchanging. New deals, changes to existing deals, accounting statements for reconciliation among brokers and underwriters, new claims and updates to existing claims are all processed centrally.
Much progress has been made to convert central processing from paper-based to electronic. The advantages are obvious - reduction in manual data (re)entry, reduction in the inevitable errors from manual (re)entry of data, and process efficiency which all translates to reduced time and cost of binding policies. Ultimately the client should benefit and Lloyd's and London should be on a more competitive level playing field with other insurance markets globally.
As I posted in December (here) the adoption of electronic processing of claims and accounting reconciliations is progressing significantly. With more and more electronic messaging using the ACORD standards and most via the Web Connectivity gateway, there is palpable momentum and there is no question that the bureau's vans carrying paper to offsite processing centers will soon be extinct.
Lloyd's now expects all new claims to be electronic by the end of March 2008 and other London underwriters are targeting the end of September 2008. Everyone is expecting to reconcile accounting statements electronically by the end of March 2008.
While new deal syndication (aka "placement") is going to be via paper this year, the market is expecting to build momentum to electronically communicate changes to existing deals (aka "endorsements") in 2008.
It might seem to make sense to start with the beginning of the process (placement) but this didn't work with Kinnect (£70m spent with no result) and the bond and equity markets moved to electronic processing of accounting first before the equivalent of placement was moved online. In fact online bond trading was just taking off when this author joined Bloomberg in 1994. It was great to be in the middle of that transformation and equally rewarding to be part of the solution here.