City consortium acquires insurance trading service, RI3K
Press Releases / 3 May 2007
London: IPGL Limited, a private holding company of which Michael Spencer, Group Chief Executive of ICAP plc is the major shareholder, has acquired a stake in the internet insurance trading service RI3K, from Brit Insurance Holdings. IPGL has joined forces with investment fund Eton Park, investment banking and broking group Numis Corporation, and Climate Exchange plc CEO Neil Eckert to acquire a controlling interest. Brit, which has backed RI3K since its establishment in May 2000, has reduced its shareholding from 86% to 19.9% on a fully diluted basis.
The transaction follows the recent announcement that RI3K has signed a long-term contract to provide paperless trading to Lloyd’s of London, after a successful implementation for the new Lloyd’s China venture based in Shanghai. In addition, US broker Aon, the world’s largest insurance intermediary, has also contracted with RI3K to trade from London.
Commercial insurance remains reliant upon paper-based business practices. The RI3K service allows efficient paperless processing of complex insurance contracts, to the benefit of buyers, sellers and their intermediaries. Whilst RI3K’s existing users include most of the London market’s leading companies, it was Lloyd’s recent adoption of the service that crystallised the commitment of the London market to becoming more competitive.
“Migration to electronic trading at the London Stock Exchange increased volumes and remains a key factor in the City being the global centre it is today. The same is happening in insurance,” said RI3K’s Chief Executive, Alex Letts. “As the insurance industry faces its own transformation, this investment in RI3K secures vital infrastructure for the long haul.”
Michael Spencer, Chairman of IPGL said: “It is very exciting that this investment will help take RI3K on to the next stage of its development. The insurance market is primed and ready for paperless trading and we can help RI3K add real value to the global insurance marketplace.”
Erland Karlsson, Chief Executive of Eton Park International commented: “Eton Park is pleased to support this innovative business, which offers great benefits for the insurance industry in terms of efficiency, liquidity and transparency. This investment extends Eton Park’s track record of investing in businesses positioned at the forefront of the evolution of the insurance and financial services markets.”
Oliver Hemsley, CEO of Numis said: “RI3K is the only viable trading service to serve this sector as it is able to handle the whole risk placement process electronically from data collection prior to placement, through quote, bind and endorsement. We think that RI3K is therefore poised quickly to become the market standard. Pressures are mounting in the industry to make business practices more efficient and cost effective. Contract certainty and the need for clear audit trails following regulatory investigations add further to RI3K’s value proposition. I am very pleased that Numis is able to participate directly in assisting this exciting industry development.”
Dane Douetil, Chief Executive of Brit said: “The sale of our majority stake in RI3K achieves our objective of focusing our business on its core activities. Furthermore, this transaction represents a significant step in the development of RI3K. Our continuing interest in the Company is testament to our belief in its successful future.”