Reforms gather pace
7 November 2008
The London market has gone from laggard to leader as reform of the way it operates gathers pace.
David Andrews, Chief Executive of Xchanging Plc, the international firm that provides back office processing for the London insurance market, told 300 delegates from across the industry at the firm’s annual insurance conference in Brighton that London was set to prove its worth as the credit crisis continued.
Andrews said: “Without a shadow of doubt the London insurance market moved from laggard to leader with its enviable standard electronic platform available to the whole insurance market.”
He added that the challenges the market had faced in driving change could not be underestimated as it moved from ‘Victorian pipe work to pretty slick fibre optics’.
Andrews also said that the economic crisis had proved the benefit of a subscription market as firms remained reluctant to place their risks with a single carrier, following the high profile problems of major underwriters across the world.
“The benefit of a subscription market to the management of counter party risk, which is so vital in the current climate, has once again been proved,” he added.
Sue Langley, Director of Market Operations and North America for Lloyd’s, told delegates that the progress made in the past 12 months has been ‘fantastic’ but said the time had come to take a ‘bold step’ into the future.
“We can continue to improve on what we already have but our other choice is to reinvent the way the market does business,” she said.
Langley said the time had come to put a new way of working in place, as the changing global business environment asked new questions of the London market and how it created and handled the relationships with both its brokers and its clients.
“We have to think about how we do this now and not wait for a crisis to push us into action,” she added. “If we wait for a crisis then it will be too late.
She urged delegates to think about what the market of the future should look like and how London should operate in the twenty first century.
“We need to think about how we would design the way we would operate if we were establishing this industry tomorrow with a blank sheet of paper,” said Langley.
“When you look at what has been achieved, it is fantastic. But we can’t be complacent and we have to look at how we can do what we do better, more efficiently and reduce the costs of doing business in London.”
Executive Director and Chairman of Travelers Syndicate Management, Barnabus Hurst-Bannister, said the drive for market reform had to be closely linked with the delivery of sustained underwriting profit.
He told the conference that if revenues were hit then spending on new systems would fall victim.
“There needs to be a virtuous circle,” he said. “Underwriting profits will generate the revenue to adequately invest in new systems, which will in turn drive greater underwriting profits.”
Last updated on 07 Nov 2008
