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By Andy McCue, 25 January 2006 13:50

NEWS

Lloyds of London has closed down a £70m electronic trading platform after failing to convince enough insurance underwriters and brokers to switch from paper files and folders.

The Kinnect system was launched in 2001 and was supposed to provide a central electronic hub for broking companies to connect their systems to so they could store and transfer documents and files online instead of physically moving the paperwork.

Although the platform is not an actual trading exchange, it supports the online transfer of risk information and documents needed by brokers and underwriters in analysing and putting a policy together.

By the end of 2003 Kinnect had signed up six major insurance brokers to use the service but since then it has failed to make an impact with just 21 of a possible 213 firms currently using the electronic hub.

Kinnect's interim chairman Michael Dawson said there is no longer demand for a central electronic trading hub and that other more viable technology alternatives have emerged since Kinnect entered the market five years ago.

In a letter to Kinnect customers seen by silicon.com, he said: "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."

Dawson said Kinnect also no longer fitted in with Lloyds' long-term business plan: "As set out in the Lloyds' strategic plan, there is a clear view that the franchisor's role going forward should be primarily on standards setting, not building infrastructure."

A Lloyds spokesman told silicon.com a phased approach will be taken to Kinnect's closure and that customers will be given every opportunity to complete transactions and extract data from the platform.

Lloyds' IT partners on the project were CGI and HP for the J2EE-compliant platform, which is based on HP hardware, and BEA WebLogic, Oracle 9i and Baltimore's SecureAccess authentication technology.