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Law360, London (March 12, 2020, 2:31 PM GMT) -- Lloyd's of London said it would shut its underwriting floors on Friday for the first time in its 330-year history to stress-test its response to the spread of coronavirus.
The specialist insurance market said on Thursday it would use data from the exercise to assess how well its new electronic trading system could stand in place for the traditional face-to-face business between underwriters and brokers.
The market launched its electronic trading system, named Placing Platform Ltd. — or PPL — in 2016, but it has been slow to catch on. Lloyd's has set a goal for 80% of its business to be conducted using PPL in the first quarter of the year.
"Lloyd's business continuity team has assessed the Lloyd's market's readiness to continue trading if the underwriting room needs to be closed at any point," a statement by the venerable insurance market said. "Lloyd's now proposes to stress-test this."
The underwriting room consists of four floors at the corporation's distinctive offices on 1 Lime St. and is used daily by 50,000 insurers and brokers.
Lloyd's syndicates operate from stands called "boxes" on the floor, where brokers place business with underwriters. Up until 2016, all business was done through paper-based slips, where anything was insured from satellites to the fingers of Rolling Stones guitarist Keith Richards.
The market said it would close all underwriting floors for 24 hours until Friday midnight, and carry out a "deep clean" to remove germs from the site. A spokesman said it was purely a precautionary measure as there had not yet been any infections among Lloyd's staff, nor any of the insurers who work at the site.
Lloyd's said the measures would allow it to gain "valuable information on the real-life effectiveness" of its so-called emergency trading protocol. "Relevant regulators have been informed of these plans," a spokesman added.
The news came the day after the World Health Organization upgraded the status of the virus to a pandemic, meaning it has now spread widely across the globe.
U.K. insurer LV= announced Wednesday it is no longer offering travel insurance to new customers, while Aviva said it had stopped selling additional cover.
--Editing by Tom Mudd.
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