Out-Law News 2 min. read
27 Aug 2015, 5:18 pm
David Gittings told industry publication Insurance Day that the new system, known as Placing Platform Limited (PPL), was currently being tested by practitioners. Selected early users will be able to start arranging terrorism insurance coverholder agreements using the platform "in the last quarter of this year", with a wider market release anticipated for early 2016, he said.
As part of its 'future process' review in 2013, the London Market Group recommended that a central placing platform be developed in order to speed up access to the London markets and boost the industry's international competitiveness. PPL has been developed in response to this review.
Once established, PPL will allow business to flow more easily and more cheaply into London. The platform will give underwriters a more flexible means of negotiating coverholder arrangements, and will support both face to face negotiations and direct electronic placements. It has the backing of all three market associations and both broker and insurance firms, with a board of directors drawn from all three of the LMA, International Underwriting Association (IUA) and London and International Insurance Brokers' Association (LIIBA).
Once its terrorism-related products are up and running, PPL intends to implement a "structured roll-out" across other asset classes. Gittings told Insurance Day that the platform would "probably be rolled out in a fairly well-managed and constrained way to make sure it does work" before releasing it more widely.
Gittings said that the new platform would be the "first building block" in the London market's future operating model. In a recent report published in conjunction with the Boston Consulting Group (BCG), the LMG warned that the 300-year old London insurance market was "at a tipping point" and was failing to capture business from emerging markets such as Latin America, Asia and Africa.
"You wait 100 years, then real innovation comes along all at once," said insurance law expert Nick Bradley of Pinsent Masons, the law firm behind Out-Law.com. "The government has no sooner finally given approval to the new Insurance Act, to be implemented next year, bringing English insurance law into the 21st century; than the London market finally manages to get a scheme going for an e-platform for placing risks."
"The BCG report referred to by David Gittings highlighted the challenge that London faces in remaining competitive in the global market. These things do not happen without a lot of hard work and effort, but these two developments alone will go a long way to seeing London meet those challenges. It is critical that those of us in professional support roles, such as lawyers, accountants and others, also play a part in keeping London ahead of the game," he said.
London's insurance market contributed £12 billion to UK GDP in 2013, according to the LMG and BCG report. The total gross written premium stemming from the London market in 2013 was £60bn compared with £25bn in Bermuda, £19bn in Zurich and £4bn in Singapore.