Aon To London: Time For Change Running Out

Aon To London: Time For Change Running Out

Bill Oram, operations director at Aon, made his comments Friday in London during an International Underwriting Association market briefing about the market reform proposals developed by the London Market Principles (LMP) initiative.

Mr. Oram told the group that business opportunities may be turned away from the London insurance market because inefficient accounting and settlement processes make it too expensive to service.

He added that reform of outdated practices will boost business, allowing brokers to bring more overseas risks to the marketplace.

"By bringing in accounting and settlement, in addition to the productivity benefits that have been identified, there will also be a lot more business out there that our overseas offices want to place in this marketplace," he said.

At present, Mr. Oram said, "the costs arising from inefficient market processes make it difficult for them to do this in certain areas. A big driver is to get more business into this marketplace."

The problems of the London market were outlined nine years ago in a report by Coopers & Lybrand for a precursor to the current Market Reform Group, which found that widespread duplication of processes within the London market resulted in hundreds of millions of pounds of unnecessary costs.

Mr. Oram said little has changed since then, and previous failures to properly tackle the problem were nothing to be proud of. "We have been very bad in terms of execution, follow-through and completion, and we do have reasons to be worried about London from this perspective," he said.

"The clock is ticking," he added. "Personally I do not think we have got very much time at all. We are starting to see this process change happening more aggressively in other markets, and we have to make sure we do not fall behind."

Mr. Oram's presentation at the London Underwriting Centre was chaired by Marie-Louise Rossi, chief executive of the association and chair of the LMP Accounting and Settlement Steering Group.

"Accounting and settlement reform has been one of the IUA's top priorities," she said. "The aim is to get money moved around much more efficiently for the benefit of us all in the market--IUA companies, Lloyd's and brokers, as well as our customers."

Quotes and details of Mr. Oram and Ms. Rossi's remarks were provided by the IUA, which said the views expressed by individual presenters at the briefing sessions are independent of those of the association itself. The IUA describes its group as the world's largest representative organization for international and wholesale insurance and reinsurance companies.

The organization is both a trade association, representing its members' interests internationally, and a market association supporting the business environment in London.

London Market Principles (LMP) is a market-wide initiative supported by the underwriting and broking communities at Lloyd's and in the London company market.

Sponsored by Lloyd's Market Association, the London Market Insurance Brokers' Committee, the IUA and Lloyd's, LMP aims through a process of reform to create an efficient and streamlined marketplace with improved service provided to clients.

The reforms are focused on improving services standards in placing of business, payment of premiums, production of insurance documentation and settlement of claims.

The IUA Web site is www.iua.co.uk.