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LINE 48 – a newsletter for the London Insurance Market
Published on 03/02/2011 12:02:34
LINE – a newsletter for the London Insurance Market
Editor: Roger Foord
Edition: 93
Past issues can be found at: www.rogerfoord.com/33
24 Lime Street, London EC3M 7HS
Mobile: 07710-479070
e-mail: roger@rogerfoord.com
web: www.rogerfoord.com
17th January 2011
LINE 48 – LMG Future of London’ Report - a must read, if you have a spare ten hours!
Firstly thanks to everybody who came to the charity review of the year on January 11th.
We had 80 people rammed into Balls, Lime Street for breakfast to hear about Solvency ll from Sooty, Sweep and Soo.
There was a fair amount of mayhem from Sooty, with eggs and flour, courtesy of Julian Kirkman-Page, and John Preston was his usual unique poet in the market.
Everybody seemed to very much appreciate what they had learnt from these three experts and helped to raise £550 for charities, 'Facing the world’ and 'Little Havens Children’s Hospice'.
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In this issue:
* New members
* The Future of the London Market – Your views wanted
* 2011 – Some thoughts
…. and finally
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Welcome to new members:
Stuart Pembury of Eurobase; John Hiskett and Jeff Bigmore of Aspen Re; Richard Milner of Ri3K: Paul Tuvey: Andrew Hagger of Moneynet: Barry Le Page of AonBenfield: Phil Brabazon and Dan Fernandez of Steria: Paul Abrahams of Fundamental Media: Rebecca Jones of Ark: Tony Humphreys: Peter Presland: Michelle Connolly of SSP: Adrian Wright of Advent Group: Marcus Bennett of Cognitix360: Vladimir Serbin of Total Objects: Geoff Brummell: James Levitt: Nick Hawke: John Abbott: Kate Smith of Markel: Derek Hallam and Buddy Blair of Vertafore;Beteja Grajqevci of Northdoor; Martin Haggar;Tony Bevis of AIG; Penny Cox of Kelway; Karen North; Barbara Schuler;Paul Steynberg of Brit Insurance; Mike Whitchurch of CGI; Maurice Cordina; Elaine Mason of Belvedere Mead
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The Future of the London Market – Report for comment hits EC3’s mean streets!
I am unsure as to whether to advise you against or advise you to read this rather verbose tome. It has three separate reports and so much detail, that I glazed over very quickly. But I did persevere.
Somebody within the, obviously under stretched Market Reform group, has come up with the idea that people in the market are actually interested in the minutiae of how the market works and its desire to ‘mend what is not broke’.
We have to understand that 95% of people in the London insurance market have no interest in back office technology, they do not care how the financial workings of the market are processed ( apart from their bonuses!) and almost certainly think that Acord (the data standards body) is part of a French phrase for friendliness with the UK.
However if you wish to partake or read where the market’s money is being spent then the web address is (cut and paste it all to get to the main event and save yourself the problem of finding where to look):
http://www.londonmarketgroup.co.uk/index.php?option=com_content&view=category&id=84&Itemid=193
Once there you will find so much detail that it will make the Solvency ll documentation seem like reading the Beano.
The report might raise more problems than it solves. The competition will love to see London having one of its too often ‘self bashing’ moments. Amazing how no other markets wash their dirty linen in public the way London seems to want to do.
It is OK for me to whinge but the market is not one that takes lightly to be ‘taught to suck eggs’.
The questions and answers being requested are naive, in that they might ask for example what the view is of competition for Xchanging, but the result of change and its costs are left to the imagination. Acord standards are fine, but the underlying costs for change and the accrued benefits for that change need to be known before such changes are ‘set in stone’. Most people in London just do not understand these things.
In addition what happens if the whole market, or those that respond, say bring in competition. What happens then and who is going to provide the solutions.
I leave it with you to at least give it a go. If you have a view then contact the people, mentioned in the report, and state your case.
Personally I think that the future of London is clear.
* Stop worrying about the supposed global competition, it isn’t out there.
* Keep the idea of making all central functions in London run centrally, hopefully with the Xchanging bureau services being run again by the market
* Stop the market's supposed representative bodies busy bodying with the market and give it to the central bureau to manage on behalf of everybody.hat is where the data and systems lie after all.
* With the efforts being made in the past in London to give clients a better service, start to ask them to pay up their premiums quicker. No other insurance company allows their clients to pay their premiums six weeks after the inception date, completely crazy.
* Let brokers and underwriters make their own decision on technology, such as the iPad. If it makes sense then it will happen, naturally.
* Encourage straight thorough processing, where possible, even starting with the client.
* Lastly do not give a market, like London, so much to read that they will miss the real issues. Keep it simple.
This report looks like the market’s money going down the Victorian pipe work that they were meant to replace!
But as I say above, give it a read as everybody is being encouraged to contribute, even independent consultants. However I doubt if all views can be considered and that like other reports in the past, the only difference is that at least this one can be accessed electronically.
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2011 – what is in store?
The Lloyd’s Exchange
It has to be asked what actually IBM is going to do with this. Is it theirs or is it the London markets? IBM had its chance with LIMNET twenty years ago and managed to ‘drop the ball’ when it suited them, and London suffered. Do they really deserve a second chance?
How much longer will they want their opportunity to be run by Lloyd’s staff who are basically a London market user friendly group expounding an electronic post office.
Lloyd’s salaries for such jobs could become an issue,
The plan is supposed to be that the market will co-own the Exchange and it will be called the Market Exchange Limited or maybe very limited. The owners will be the market organisations, IUA/LMA and LIIBA. There is precedence for this in that Xchanging took over the central bureau on more or less the same terms, and look where that has got everybody. A criticised service and the development of central services, such as endorsements, being taken away from them.
I reckon that IBM will not be that happy with this arrangement and will want to have more say in the running. We will see in 2011!
Qatarlyst
This might be significant as it is no secret that when the major brokers got together early in 2010 with their own Broker central data hub plans that the Lloyd’s Exchange management were a bit twitchy.
If the Qatarlyst project takes off for Aon and their Ri3k bailout, and Marsh/Willis’ then join Aon it will be seen as a global hub for their transactions. London and its Exchange might be superfluous to requirements.
If this is the case then the lack of a business strategy from Sue Langley and her team for the London Exchange, together with a long term business and cost benefit plan will come home to roost for London.
London practitioners need more than to hear ‘just get on with it’ from those with responsibility for change. They also need to know the benefits, the costs and the timings. None of this has been visible.
Not that it should matter where messages linger, but it would be nice if it is in London’s own back yard.
Acord
Acord the standards body are neutral and should be able to expound their benefits anywhere in the world in a democratic society.
2011 will see if this is achieved by the Acord management team and their board, which includes members who might not actually really want a global ‘standards’ level playing field. India and China beckon for Acord.
Solvency II
This seems to be going backwards at a fast rate, or at least nobody seems to be able to identify a final date.
Money will continue to be spent on it by the gullible. At the same time London and Lloyd’s will see a share of their business offered on a plate to the Eurozone. The good news is that like many EU initiatives most countries don’t take any notice, apart from the UK that is!
Lloyd’s chairman
It looks like the current incumbent, who got very excited about changing the Lloyd’s rules for his fixed time in the job and got the law changed to satisfy his desire, has now seen a new idea on the horizon and is off. The fact that Lloyd’s will not be in much profit for 2010and therefore bonuses will be short, might be a very sensible reason to move on, as was amusingly hinted at by the CEO of Lloyd’s at the recent Exchanging conference. ‘Should one leave when at the top’ was the phrase I think. Either way there is a vacancy and as Norman Wisdom sadly passed away in 2010 there are no obvious clients. What seems clear, however, is that the new incumbent has to be an insurance man.
IPad
This is a technology which has got some brokers and Lloyd’s excited. No amount of testing will be needed, as is the case with Lloyd’s and Marsh at the moment. If people want the iPad, as was the case with the mobile phone, they will use it. Good ideas don’t need to be force fed.
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....and finally I had just over 250 new members join the newsletter this year which brings the total number of readers registered since I started the newsletter to around 2,500. I know that some of you are kind enough to pass onto friends and business colleagues so hopefully the word gets spread even further. It is also truly global for which I have to thank Mr Google.
Please pass onto friends or colleagues and ask them to register via my website. www.rogerfoord.com .
Have a great 2011,