Willis, the third largest insurance broker, has stepped up its electronic trading capacity for terrorism exposures on worldwide property risks.

E-commerce initiatives within the re/insurance industry typically have been led by two desires: the first is to cut costs and the second is to speed up processes. With many of the internet-based facilities still to reach critical mass, it is difficult to judge how successful they are at achieving these dual aims.

Willis' new offering, however, is not trying to achieve both these ends. Instead, it is targeting just the speed side of the equation, aiming to get fast access to specialist markets that are willing to provide terrorism and sabotage cover for property risks, areas which are now being excluded by certain re/insurers in the wake of the events of 11 September.

Using capacity from Hiscox, other Lloyd's syndicates, AIG and other London company market participants, Willis' e-trading team has set up a $200m facility. As well as terrorism and sabotage, the facility can be extended to provide coverage for strikes, riots and civil commotion.

“This is not new capacity,” explained Tom Bartleet, head of the e-trading team. “We have developed this to access current capacity that is typically slow and difficult to get consensus from.” Rather than the traditional London market modus operandi of a broker walking around various underwriting boxes and offices with the risk, the Willis facility submits it directly to potentially interested insurers, saving substantial amounts of time.

The facility is aimed at medium to large commercial and industrial clients, and its major advantage is the very fast turnaround it can provide. “It is a grouping of capacity with certain commoditising factors to improve the speed and efficiency of the market,” said Mr Bartleet. “Underwriters want to access as much business as possible in standardised form.” Nevertheless, each risk is viewed on an individual basis, he added, and through it, “we should be able to get a rapid response from the broker and underwriter.” The facility has no exclusions, and includes both onshore and offshore properties, but is only accessible through Willis.

According to Mr Bartleet, there has already been “significant interest” from the Willis client base, and he anticipates that providing the cover in this form could make the product cheaper, though at the moment this is not the main rationale. Already, a “number of transactions” have been carried out over the system, he said.

“We are very excited about this new initiative as we have been piloting a general e-trading platform for 12 months now, and are confident that the electronic trading solution will provide capacity in almost real time,” he said. “This facility responds to a major need for capacity in the marketplace today.” In fact, Willis' e-trading team started developing this facility in June, but with the recent events in the US, it “ramped up” the programme.

In addition, to the terrorism and sabotage facility, the e-trading team is working on a general property offering, said Mr Bartleet. Although he declined to give further information on the timing or size of the new worldwide property facility, he did say it would have “significant capacity” when it starts.