One of the greatest writers of the 20th century, Graham Greene, originally divided his fiction into two categories: ‘entertainments’ and literary works. But as his career progressed this division became increasingly difficult and irrelevant; eventually he abandoned it altogether.
Greene’s dilemma came to mind when considering the IUA’s experience in 2016; for neatly categorising the issues we have been considering over the past 12 months is a futile task. Many of the challenges facing our market are far-reaching, raising fundamental questions that impact various different departments within the London operations of our members.
Brexit, of course, is an obvious example. The potential loss of EU financial services passporting rights for firms trading in London could, for example, affect claims teams as they service existing business, underwriters seeking to write future polices, compliance officers preparing regulatory returns and senior managers managing capital.
At the same time business development staff will be keeping a close eye on the activities of the new Department for International Trade as it seeks to open up new commercial opportunities for the UK. The global nature of risks underwritten in the London Market mean our industry is ideally placed to both support the Government in this quest and take advantage of any deals struck.
As companies prepare contingency plans to cope with life outside the EU, the IUA’s role has been to help explain the implications of these alternative arrangements to Government and outline the requirements of a trade deal that might remove the necessity of putting them into action.
Another area of focus that is holistic in its influence is market modernisation. Elsewhere in this report you will read about the progress that has been made in making London an easier place to transfer risk by standardising and streamlining business processes.
That progress is often hard won and requires careful change management, involving specialists in information technology, operations, underwriting and claims as well as senior executive sponsorship. Similarly though, the benefits of such projects can be diverse, enabling cost reductions, improved reporting capabilities and easier access to clients.
Elsewhere, much debate during the past year in the IUA’s various underwriting groups has been about new risks that do not fit comfortably into traditional classes of business. Not long ago, the main concerns for those considering cyber risk were issues of privacy. Now, it seems that just about every existing insurance policy must consider potential elements of cyber cover and, indeed, this is a subject on which we have been in correspondence with regulatory authorities. As new technologies emerge the London Market must be flexible and innovative in order to thrive.
In the face of many external influences and challenges faced by our market over the past year, the IUA has worked to help its members adapt and respond. We continue to seek the best possible business environment so that companies can maintain their vital contribution to the national economy.