London Insurance Market Unites to Form New Service Company

Apr 27, 2001, 01:00 ET from Lloyd's of London

    LONDON, April 27 /PRNewswire/ -- Negotiations to form a new company that
 will unify and improve the vital back office services supporting the London
 Insurance Market have been concluded successfully.  The joint venture between
 Lloyd's, the International Underwriting Association (IUA) and Xchanging, will
 commence on May 1st under the name of Ins-sure Services Limited.  Lloyd's and
 the IUA each own 25% of the company, and Xchanging the remaining 50%.
     The improvements that the new company aims to achieve are central to the
 reform of the London Insurance Market and essential to its continued
 leadership in the global insurance industry.
     The separate processing and settlement operations of Lloyd's Policy
 Signing Office (LPSO) and the IUA's London Processing Centre (LPC) will be
 joined in the new organization.  Ins-sure will build a single service from
 these resources designed to make London a more efficient market for
 syndicates, insurance companies and brokers.
     Ins-sure will take over the service agreements of LPSO and LPC with an
 agenda agreed by the London market to modernize processes in the interests of
 policyholders while reducing the cost of administration.  The company also has
 the objective of developing the e-business infrastructure that will enable
 market participants to continue to compete effectively globally over the
 longer term.
     With an estimated 20 billion pounds annual turnover of premiums and claims
 settlements Ins-sure will start trading as one of the largest insurance
 service companies in the world.
     Ins-sure's chairman will be Sir Laurie Magnus, an investment banker,
 shortly to join Lexicon Partners as vice chairman, from Credit Suisse First
 Boston.  Michael Taylor who is currently director of Insurance Services at
 Lloyd's will move to the role of vice chairman in the new company. David
 Andrews, a founder of Xchanging and previously a board member of Andersen
 Consulting will be chief executive.  Mike Hannan of LPC, Michael Collins of
 LPSO and John Benjamin of Xchanging are appointed executive directors.
 Non-executive directors will be Tim Carroll, CEO of GE Frankona and Chairman
 of the IUA, and Julian Cusack, finance director of Wellington Underwriting
 plc.
     Forming the company has involved the three parties in a complex set of
 negotiations to transfer assets, staff and systems, since signing letters of
 intent six months ago.  Staff from the three companies have already been
 involved in a major change program in preparation for the integration that is
 now due to be carried out.  The company plans to keep the existing operations
 of LPSO in Chatham and LPC in Folkestone and all employees will transfer to
 Ins-sure.
     Xchanging, a support services company funded by General Atlantic Partners,
 will be investing 15 million pounds over 5 years in the new company.  Further
 investment in business process management software will also be made available
 to the company by Xchanging to achieve service improvements and to pave the
 way for new e-business developments that will extend Ins-sure's services to
 the global insurance industry.
     Chief executive of Ins-sure and Xchanging David Andrews said: "Bringing
 LPC and LPSO together is a great achievement. Xchanging is delighted to be
 playing a part in this major restructuring of a key part of the UK insurance
 industry."
     Explaining why the London market needed to merge its processing
 capabilities, Tony Medniuk, deputy chairman of the IUA and chairman of LPC
 said: "This is about much more than just improving and harmonizing the
 existing functions of the LPC and LPSO, though that alone will bring our
 members substantial business benefits. It will also provide our market with a
 means to make full use of Internet technology over the next few years."
     Lloyd's chief executive Nick Prettejohn said: "All of us are determined
 that London will continue to be at the center of the world insurance market.
 This new venture will play a key role in securing that competitive future."
     Ins-sure is committed to producing within six months detailed service
 definitions and service standards for approval by the panels representing the
 interests of Lloyd's and the IUA.  The board and management team now start the
 process of developing the detailed work plans to implement the business plan
 agreed by the three partners.
 
     Notes to editors:
     1)  Biographies of Chairman, Vice Chairman and CEO follow:
 
     Sir Laurie Magnus, Chairman Ins-sure
     Sir Laurie Magnus (45), an investment banker, is currently in the process
 of joining Lexicon Partners, a privately owned corporate finance advisory
 business, where he will be vice chairman.  He will be joining the firm from
 Credit Suisse First Boston  (CSFB) where he was a managing director in its
 financial institutions group.
     Previously he was a director of Phoenix Securities Limited, a business he
 joined in 1995.  Following its acquisition by Donaldson, Lufkin and Jennette
 Inc. (DLJ), the US investment bank he became a managing director of the merged
 business.  DLJ was acquired by CSFB in 2000.
     His earlier career, from 1977 to 1995, was with Samuel Montagu & Co.
 Limited, where after several years with the bank in Singapore, he joined its
 corporate advisory division in London.  He became a director of the bank and
 deputy head of its UK corporate finance department.
     Since 1996, his principal focus has been on the insurance industry, where
 he has been extensively involved with capital raisings and mergers and
 acquisitions, particularly within the London market.
     Sir Laurie Magnus is also a member of the Finance Committee of the
 National Trust.
 
     Michael Taylor, Vice-chairman Ins-sure
     Prior to joining Ins-sure, Michael Taylor (53), was director, Lloyd's
 Insurance Services, which provides a wide range of business processing and
 technology services to the Lloyd's market.  He was responsible for the
 operations of Lloyd's Policy Signing Office, Lloyd's Claims Office, Lloyd's
 Agency department and the IT Services Division.
     He has led a major change program to streamline and commercialize the
 operations of Insurance Services. He initiated the outsourcing of technology
 services and played a major part in establishing joint ventures with third
 parties, particularly the joint venture with the IUA's London Processing
 Centre and Xchanging.  He has also been actively involved in the reform of
 London Market business processes through his membership of the IUA-Lloyd's
 Forum.
     After graduating from Sheffield University in Metallurgy, his early career
 was spent with British Steel Corporation, ICL and the Royal Bank of Scotland
 group.  He spent nine years with the Lloyd's broking group Stewart Wrightson
 plc, latterly as Group Systems Director before joining Morgan Grenfell & Co.
 as Group IT Development Manager.
     He returned to the Lloyd's market in 1988 as Managing Director of LUNCO
 Ltd.  He was appointed General Manager of Lloyd's Claims Office on its
 formation in 1992 and to his post in Lloyd's Insurance Services in January
 1997.
     He is a vice president of the Insurance Institute of London and a member
 of the advisory boards of CIO Connect Ltd, eQuest One (UK) Ltd and MIS UK.
 
     David Andrews, Chief Executive Ins-sure
     David Andrews (51), is also chief executive of Xchanging, a company he
 founded in 1999.  Previously he was with Andersen Consulting where he founded
 the firm's outsourcing business in 1986.
     In 1990 he led Andersen Consulting's successful accounting outsourcing for
 British Petroleum -- the first of its kind in the world.  In 1992 he led the
 major outsourcing arrangement for the London Stock Exchange, the scope of
 which covered price dissemination, company news information services and
 trading settlement technology services.
     In 1994 he relocated to Paris to take responsibility for Andersen
 Consulting's business in West Europe.  Over three years he moved West Europe
 from the worst to the most profitable of the 9 Andersen Consulting regions
 worldwide.
     Following a re-organization in 1997 he took responsibility for one of
 Andersen Consulting's global five market units and spent much of his time in
 the USA.
     He was one of the eight Andersen Consulting board members in Andersen
 Worldwide and a member of the Budget and Partner Admissions sub-committees.
     Before joining Andersen Consulting he was managing a major program of
 hospital refurbishment and health care infrastructure renewal in Zaire.
 
     2)  Photographs of Sir Laurie Magnus, Michael Taylor and David Andrews are
 available in an electronic format. Contact the Lloyd's press office on
 +020-7327-6256 or 6272
 
     3)  An electronic version of the new Ins-sure logo is available from
 Lloyd's press office on +020-7327-6256 or 6272
 
     4)  Background notes on the London Insurance Market follow:
 
     a)  London hosts the world's premier international market for insurance.
 The market includes virtually all the world's top international insurance and
 reinsurance companies, which conduct business worldwide from their London
 operations.
 
     b)  Currently there are operating in the market: 108 Syndicates, about
 100 insurance and reinsurance companies, 39 Marine Protection and Indemnity
 Clubs and 127 brokers.
 
     c)  The total written gross premium income of the London Insurance Market
 in 1999 was 14.2 billion pounds.
 
     d)  The London market is international not only in the sources of its
 business but also in the ownership of its participants.  Virtually all of the
 world's 20 largest reinsurance groups are represented in London, and over
 three-quarters of the companies are foreign owned.
 
     e)  Lloyd's is the world's second largest commercial insurer and eighth
 largest reinsurer.  During 2001, it has the capacity to accept premiums worth
 around 11 billion pounds, and has licenses to trade in 64 territories around
 the world.
 
     f)  London is a subscription market -- that is to say most risks are
 shared by more than one capital provider.  The vast majority of business is
 introduced by brokers on behalf of their clients.
 
     g)  The London market is unique in that so much expertise is concentrated
 into a small area -- 107 insurance and reinsurance companies, the Lloyd's
 market, brokers and a wide range of service providers are located within
 walking distance of each other.
 
     h)  London is a leading center for reinsurance and several types of
 commercial insurance, including marine, aviation, transport and energy and
 other complex or large risks.  There are certain complex high risk types of
 cover for which London offers the only market, such as third world trade
 deals, kidnap, ransom and space insurance.
 
     i)  London writes an estimated 25% of the world's international
 reinsurance, at least 30% of marine insurance and 42% of aviation.  While
 there are no totally reliable figures, there is little doubt that it has lost
 world share in marine and aviation.  Its share of treaty reinsurance has
 however, remained relatively stable.
 
     j)  The company sector is represented by the International Underwriting
 Association of London (IUA), which has its headquarters at the London
 Underwriting Centre in the City.
 
     k)  The London market supports approximately 50,000 jobs and contributes
 more than 4 billion pounds p.a. to invisible exports.  Despite increased
 competition, both Lloyd's and the company sector have continued to attract new
 players from overseas.
 
     l)  Brokers and insurers operating in the London Market make a major
 contribution to the UK balance of payments in two ways.  First brokers'
 overseas income and the underwriting of foreign risks together accounted for
 13% of the City's net overseas earnings from the supply of services in 1999.
 Secondly, portfolio income is received from the investment of insurers' funds
 abroad.
 
     m)  Prior to the formation of Ins-sure, premiums and claims were processed
 through two electronic market bureaus -- the Lloyd's Policy Signing Office
 (LPSO) and the IUA's London Processing Centre (LPC), which together handled
 some 1.8 million accounting entries each year and generated 13 million
 electronic transactions.
 
     n)  Both Lloyd's and IUA have actively encouraged the development of
 e-commerce, including the establishment of an international insurance business
 center, WISE.
 
     5)  About Lloyd's of London
     Lloyd's is the world's leading insurance market with a capacity to accept
 insurance at Lloyd's, covering all classes of business from more than
 100 countries worldwide.  premiums of more than 11 billion pounds.  In 2001,
 108 syndicates are underwriting
     Approximately five per cent of world reinsurance is placed at Lloyd's
 which also accounts for half of the London market's international insurance
 premiums.  The market has an A+ rating from Standard & Poor's.
 
     6)  About Xchanging
     Xchanging works in partnership with global companies to transform back
 offices into world-class service businesses.  Focusing on human resources,
 accounting, procurement and customer administration, Xchanging builds highly
 specialized enterprises that improve the standard of service delivered.
     Xchanging has a unique 'Enterprise Partnership' approach that is founded
 on a model where the incentives for Xchanging and its client partners are
 fully aligned.
     Xchanging is a portfolio company of General Atlantic Partners LLC, a
 leading investor in IT, Internet and Internet-enabled businesses.
 
     7)  About IUA
     The IUA is the world's largest organization for international representing
 commercial insurers and reinsurers.  Its aim is to ensure that the
 international market centered on London offers its members a first-class
 environment in which to do business.  The association's membership includes
 most large and medium-sized international insurance company.
     The IUA's principal activities include: representation and promotion
 worldwide; market reform and the promotion of e-commerce; technical support;
 education and training; and information and research.
     It also represents members to policy makers and regulators in the US, the
 European Union and the World Trade Organization talks.
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X87891921
 
 

SOURCE Lloyd's of London
    LONDON, April 27 /PRNewswire/ -- Negotiations to form a new company that
 will unify and improve the vital back office services supporting the London
 Insurance Market have been concluded successfully.  The joint venture between
 Lloyd's, the International Underwriting Association (IUA) and Xchanging, will
 commence on May 1st under the name of Ins-sure Services Limited.  Lloyd's and
 the IUA each own 25% of the company, and Xchanging the remaining 50%.
     The improvements that the new company aims to achieve are central to the
 reform of the London Insurance Market and essential to its continued
 leadership in the global insurance industry.
     The separate processing and settlement operations of Lloyd's Policy
 Signing Office (LPSO) and the IUA's London Processing Centre (LPC) will be
 joined in the new organization.  Ins-sure will build a single service from
 these resources designed to make London a more efficient market for
 syndicates, insurance companies and brokers.
     Ins-sure will take over the service agreements of LPSO and LPC with an
 agenda agreed by the London market to modernize processes in the interests of
 policyholders while reducing the cost of administration.  The company also has
 the objective of developing the e-business infrastructure that will enable
 market participants to continue to compete effectively globally over the
 longer term.
     With an estimated 20 billion pounds annual turnover of premiums and claims
 settlements Ins-sure will start trading as one of the largest insurance
 service companies in the world.
     Ins-sure's chairman will be Sir Laurie Magnus, an investment banker,
 shortly to join Lexicon Partners as vice chairman, from Credit Suisse First
 Boston.  Michael Taylor who is currently director of Insurance Services at
 Lloyd's will move to the role of vice chairman in the new company. David
 Andrews, a founder of Xchanging and previously a board member of Andersen
 Consulting will be chief executive.  Mike Hannan of LPC, Michael Collins of
 LPSO and John Benjamin of Xchanging are appointed executive directors.
 Non-executive directors will be Tim Carroll, CEO of GE Frankona and Chairman
 of the IUA, and Julian Cusack, finance director of Wellington Underwriting
 plc.
     Forming the company has involved the three parties in a complex set of
 negotiations to transfer assets, staff and systems, since signing letters of
 intent six months ago.  Staff from the three companies have already been
 involved in a major change program in preparation for the integration that is
 now due to be carried out.  The company plans to keep the existing operations
 of LPSO in Chatham and LPC in Folkestone and all employees will transfer to
 Ins-sure.
     Xchanging, a support services company funded by General Atlantic Partners,
 will be investing 15 million pounds over 5 years in the new company.  Further
 investment in business process management software will also be made available
 to the company by Xchanging to achieve service improvements and to pave the
 way for new e-business developments that will extend Ins-sure's services to
 the global insurance industry.
     Chief executive of Ins-sure and Xchanging David Andrews said: "Bringing
 LPC and LPSO together is a great achievement. Xchanging is delighted to be
 playing a part in this major restructuring of a key part of the UK insurance
 industry."
     Explaining why the London market needed to merge its processing
 capabilities, Tony Medniuk, deputy chairman of the IUA and chairman of LPC
 said: "This is about much more than just improving and harmonizing the
 existing functions of the LPC and LPSO, though that alone will bring our
 members substantial business benefits. It will also provide our market with a
 means to make full use of Internet technology over the next few years."
     Lloyd's chief executive Nick Prettejohn said: "All of us are determined
 that London will continue to be at the center of the world insurance market.
 This new venture will play a key role in securing that competitive future."
     Ins-sure is committed to producing within six months detailed service
 definitions and service standards for approval by the panels representing the
 interests of Lloyd's and the IUA.  The board and management team now start the
 process of developing the detailed work plans to implement the business plan
 agreed by the three partners.
 
     Notes to editors:
     1)  Biographies of Chairman, Vice Chairman and CEO follow:
 
     Sir Laurie Magnus, Chairman Ins-sure
     Sir Laurie Magnus (45), an investment banker, is currently in the process
 of joining Lexicon Partners, a privately owned corporate finance advisory
 business, where he will be vice chairman.  He will be joining the firm from
 Credit Suisse First Boston  (CSFB) where he was a managing director in its
 financial institutions group.
     Previously he was a director of Phoenix Securities Limited, a business he
 joined in 1995.  Following its acquisition by Donaldson, Lufkin and Jennette
 Inc. (DLJ), the US investment bank he became a managing director of the merged
 business.  DLJ was acquired by CSFB in 2000.
     His earlier career, from 1977 to 1995, was with Samuel Montagu & Co.
 Limited, where after several years with the bank in Singapore, he joined its
 corporate advisory division in London.  He became a director of the bank and
 deputy head of its UK corporate finance department.
     Since 1996, his principal focus has been on the insurance industry, where
 he has been extensively involved with capital raisings and mergers and
 acquisitions, particularly within the London market.
     Sir Laurie Magnus is also a member of the Finance Committee of the
 National Trust.
 
     Michael Taylor, Vice-chairman Ins-sure
     Prior to joining Ins-sure, Michael Taylor (53), was director, Lloyd's
 Insurance Services, which provides a wide range of business processing and
 technology services to the Lloyd's market.  He was responsible for the
 operations of Lloyd's Policy Signing Office, Lloyd's Claims Office, Lloyd's
 Agency department and the IT Services Division.
     He has led a major change program to streamline and commercialize the
 operations of Insurance Services. He initiated the outsourcing of technology
 services and played a major part in establishing joint ventures with third
 parties, particularly the joint venture with the IUA's London Processing
 Centre and Xchanging.  He has also been actively involved in the reform of
 London Market business processes through his membership of the IUA-Lloyd's
 Forum.
     After graduating from Sheffield University in Metallurgy, his early career
 was spent with British Steel Corporation, ICL and the Royal Bank of Scotland
 group.  He spent nine years with the Lloyd's broking group Stewart Wrightson
 plc, latterly as Group Systems Director before joining Morgan Grenfell & Co.
 as Group IT Development Manager.
     He returned to the Lloyd's market in 1988 as Managing Director of LUNCO
 Ltd.  He was appointed General Manager of Lloyd's Claims Office on its
 formation in 1992 and to his post in Lloyd's Insurance Services in January
 1997.
     He is a vice president of the Insurance Institute of London and a member
 of the advisory boards of CIO Connect Ltd, eQuest One (UK) Ltd and MIS UK.
 
     David Andrews, Chief Executive Ins-sure
     David Andrews (51), is also chief executive of Xchanging, a company he
 founded in 1999.  Previously he was with Andersen Consulting where he founded
 the firm's outsourcing business in 1986.
     In 1990 he led Andersen Consulting's successful accounting outsourcing for
 British Petroleum -- the first of its kind in the world.  In 1992 he led the
 major outsourcing arrangement for the London Stock Exchange, the scope of
 which covered price dissemination, company news information services and
 trading settlement technology services.
     In 1994 he relocated to Paris to take responsibility for Andersen
 Consulting's business in West Europe.  Over three years he moved West Europe
 from the worst to the most profitable of the 9 Andersen Consulting regions
 worldwide.
     Following a re-organization in 1997 he took responsibility for one of
 Andersen Consulting's global five market units and spent much of his time in
 the USA.
     He was one of the eight Andersen Consulting board members in Andersen
 Worldwide and a member of the Budget and Partner Admissions sub-committees.
     Before joining Andersen Consulting he was managing a major program of
 hospital refurbishment and health care infrastructure renewal in Zaire.
 
     2)  Photographs of Sir Laurie Magnus, Michael Taylor and David Andrews are
 available in an electronic format. Contact the Lloyd's press office on
 +020-7327-6256 or 6272
 
     3)  An electronic version of the new Ins-sure logo is available from
 Lloyd's press office on +020-7327-6256 or 6272
 
     4)  Background notes on the London Insurance Market follow:
 
     a)  London hosts the world's premier international market for insurance.
 The market includes virtually all the world's top international insurance and
 reinsurance companies, which conduct business worldwide from their London
 operations.
 
     b)  Currently there are operating in the market: 108 Syndicates, about
 100 insurance and reinsurance companies, 39 Marine Protection and Indemnity
 Clubs and 127 brokers.
 
     c)  The total written gross premium income of the London Insurance Market
 in 1999 was 14.2 billion pounds.
 
     d)  The London market is international not only in the sources of its
 business but also in the ownership of its participants.  Virtually all of the
 world's 20 largest reinsurance groups are represented in London, and over
 three-quarters of the companies are foreign owned.
 
     e)  Lloyd's is the world's second largest commercial insurer and eighth
 largest reinsurer.  During 2001, it has the capacity to accept premiums worth
 around 11 billion pounds, and has licenses to trade in 64 territories around
 the world.
 
     f)  London is a subscription market -- that is to say most risks are
 shared by more than one capital provider.  The vast majority of business is
 introduced by brokers on behalf of their clients.
 
     g)  The London market is unique in that so much expertise is concentrated
 into a small area -- 107 insurance and reinsurance companies, the Lloyd's
 market, brokers and a wide range of service providers are located within
 walking distance of each other.
 
     h)  London is a leading center for reinsurance and several types of
 commercial insurance, including marine, aviation, transport and energy and
 other complex or large risks.  There are certain complex high risk types of
 cover for which London offers the only market, such as third world trade
 deals, kidnap, ransom and space insurance.
 
     i)  London writes an estimated 25% of the world's international
 reinsurance, at least 30% of marine insurance and 42% of aviation.  While
 there are no totally reliable figures, there is little doubt that it has lost
 world share in marine and aviation.  Its share of treaty reinsurance has
 however, remained relatively stable.
 
     j)  The company sector is represented by the International Underwriting
 Association of London (IUA), which has its headquarters at the London
 Underwriting Centre in the City.
 
     k)  The London market supports approximately 50,000 jobs and contributes
 more than 4 billion pounds p.a. to invisible exports.  Despite increased
 competition, both Lloyd's and the company sector have continued to attract new
 players from overseas.
 
     l)  Brokers and insurers operating in the London Market make a major
 contribution to the UK balance of payments in two ways.  First brokers'
 overseas income and the underwriting of foreign risks together accounted for
 13% of the City's net overseas earnings from the supply of services in 1999.
 Secondly, portfolio income is received from the investment of insurers' funds
 abroad.
 
     m)  Prior to the formation of Ins-sure, premiums and claims were processed
 through two electronic market bureaus -- the Lloyd's Policy Signing Office
 (LPSO) and the IUA's London Processing Centre (LPC), which together handled
 some 1.8 million accounting entries each year and generated 13 million
 electronic transactions.
 
     n)  Both Lloyd's and IUA have actively encouraged the development of
 e-commerce, including the establishment of an international insurance business
 center, WISE.
 
     5)  About Lloyd's of London
     Lloyd's is the world's leading insurance market with a capacity to accept
 insurance at Lloyd's, covering all classes of business from more than
 100 countries worldwide.  premiums of more than 11 billion pounds.  In 2001,
 108 syndicates are underwriting
     Approximately five per cent of world reinsurance is placed at Lloyd's
 which also accounts for half of the London market's international insurance
 premiums.  The market has an A+ rating from Standard & Poor's.
 
     6)  About Xchanging
     Xchanging works in partnership with global companies to transform back
 offices into world-class service businesses.  Focusing on human resources,
 accounting, procurement and customer administration, Xchanging builds highly
 specialized enterprises that improve the standard of service delivered.
     Xchanging has a unique 'Enterprise Partnership' approach that is founded
 on a model where the incentives for Xchanging and its client partners are
 fully aligned.
     Xchanging is a portfolio company of General Atlantic Partners LLC, a
 leading investor in IT, Internet and Internet-enabled businesses.
 
     7)  About IUA
     The IUA is the world's largest organization for international representing
 commercial insurers and reinsurers.  Its aim is to ensure that the
 international market centered on London offers its members a first-class
 environment in which to do business.  The association's membership includes
 most large and medium-sized international insurance company.
     The IUA's principal activities include: representation and promotion
 worldwide; market reform and the promotion of e-commerce; technical support;
 education and training; and information and research.
     It also represents members to policy makers and regulators in the US, the
 European Union and the World Trade Organization talks.
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X87891921
 
 SOURCE  Lloyd's of London