With Brexit looming the International Underwriting Association (IUA) has named regulatory development as a top priority for the London Insurance Market in 2018, if the re/insurance hub is to retain its global relevance in coming years.
Firms operating in the London market have been tasked with the challenge of adapting to ongoing changes in the regulatory environment within what the IUA has called a “pivotal year.”
Dave Matcham, chief executive of association, said; “the need to establish mutual market access between the UK and EU and agree an implementation period before a new trading arrangement post-Brexit are incredibly important.
“In addition, at least three significant new regulations become effective during the year: namely, the General Data Protection Regulation, the Insurance Distribution Directive and the enhanced Senior Insurance Managers Regime.”
A key factor in the future success of the London market will be whether regulators can deliver effective changes that modernise London’s business processes and help drive efficiencies, while simultaneously delivering post-Brexit trading continuity.
In addition, the IUA business plan highlighted the need to maintain best underwriting practices and prioritise technology to recognise changing risk profiles.
The use of new Target Operating Model (TOM) infrastructure projects are a part of this push, helping players to move towards a sustainable ‘user-pays’ funding model.
Matcham said he believed the TOM programme would only be successful if “e-placing is widely used and supported by enhanced capture of data in a structured manner. Growing volumes and take-up for Placing Platform Limited is clearly a top priority.
Another important project on the cards for 2018 will be completing the re-platforming of the Insurers’ Market Repository.
“Our members place huge reliance on the repository and it is, therefore, imperative that this process proceeds smoothly and does not cause market disruption,” said Matcham.
Re/insurers operating in the London Market are already taking steps to shore up any potential post-Brexit losses through contingency plans to open EU subsidiaries.
Although no single competitor has emerged to the London Market until now, it’s considered expensive to operate out of, and coupled with the political uncertainty, keeping up with the changes necessary to maintain its global relevance is a challenge for both regulators and industry players.
How well these entities manoeuvre through the changes in 2018 could set the tone for the London market post-Brexit.