In recent years the IUA’s financial position has been bolstered by the addition of several new member companies and this trend continued in 2016. Both the Norwegian Hull Club and General Insurance Corporation of India joined during the course of the year, followed in early 2017 by Barents Re.
An increased workload for the IUA secretariat prompted a 3% increase in membership fees. This rise, together with the growth in membership, ensures that the vast majority of our operating expenditure is covered by subscriptions; a small operating deficit is made up from cash reserves.
As in previous years, the association’s highest items of expenditure relate to various market modernisation projects which have been paid for by reinvesting, on behalf of members, the dividend received from our shareholding in Xchanging Ins-sure Services.
The takeover of Xchanging by CSC (and, subsequently, the formation of CXC.technology) means that the company now operates on a financial year of 1 April to 31 March. Since the IUA needs XIS accounts to confirm agreed dividend payments and asset carrying valuations, our annual meeting takes place slightly later this year.
Looking to the future, DXC has approached the IUA, the Corporation of Lloyd’s and Lloyd’s Market Association to discuss the possibility of a strategic renegotiation of its contracts to provide long-term enhanced, centralised bureau services. This long term partnership is aimed at delivering an operating model based on greater principles of automation and reduced manual intervention.
The IUA Board is overseeing these negotiations which may, of course, have a material impact on the association’s future activities. If a successful conclusion is reached in any negotiations, it is anticipated that a new master shared services agreement will overarch newer versions of existing contracts.
The IUA’s financial affairs are supervised by members serving on our Finance and Audit Committee which is chaired by David Radford, Chief Financial Officer at Transatlantic Re. I would like to take this opportunity to thank him, other committee members and our auditors Grant Thornton for their support and guidance.
A full set of the IUA’s financial statements has been sent to members.