The somewhat confusing history of the London reinsurance market's associations is typical of a movement which responds to demands and fulfils individuals' needs, rather than one imposed by one person or small group. David Holmes looks back - and forward.

The evolution of marine insurance in medieval times is usually portrayed as romantic and exciting. The City of London thrived on the enterprises of merchant venturers - any loss “lighteth easily on the many” in the words of the Elizabethan Insurance Act - but it must have seemed hard at times for the people involved.Likewise, the Great Fire of London of 1666 is now regarded as a temporary blip in the development of the City, but at the time it could hardly have been more disastrous for the inhabitants and their businesses. From it, however, the concept of property insurance was born.

A further romantic period followed, with the coffee shop and the company fire brigades (again, not so romantic for the poor souls whose ships sank and property burned down). It culminated in disastrous fires in London warehouses, which forced the fire brigades to merge and become a public concern. Meanwhile the growth of industry and the railways led to accident insurance, liability insurance, theft cover and, eventually, motor insurance.The great companies followed the expansion of European influence round the world, particularly in the United States. There, the notorious San Francisco earthquake reinforced London's reputation for service and reliability. In the light of recent American experience, critics might consider this a mixed blessing, but in due course the losses suffered by Lloyd's and many companies will be seen as another temporary setback.

When reinsurance was illegal
For many years, reinsurance was illegal in Britain. As a result, the market developed in other countries, particularly Germany and Switzerland. It was not until the early years of the present century that the major British reinsurance company, Mercantile and General, was formed. And it was only 30 years ago that the then general manager, Julius Neave, persuaded his colleagues in London to form the Reinsurance Offices' Association (ROA).

Although a relatively slow starter, London has become the centre of international reinsurance. The infant ROA, launched by a group of UK reinsurance managers, soon became a meeting point for the great companies from many countries.

The next step was to set up a servicing bureau for reinsurance and wholesale insurance companies, similar to those serving Lloyd's and the company marine market. Mr Neave's hope was that this could be formed within the ROA, but not everyone shared his vision. The policy signing and accounting centre (PSAC) was founded as a separate body. However, the vision became reality in 1991, when the two bodies merged to form the now familiar LIRMA, a name no sooner learned than discarded in favour of the International Underwriting Association of London (IUA).

This inefficient and confusing history is typical of a movement which responds to demands and fulfils individuals' needs, rather than one thought up by one person or small group and imposed on everyone else. One of the great lessons of the 20th century has been that totalitarian states can look efficient for a number of years, but in the end they collapse (such a pity certain people did not read up on the Roman Empire), whereas long term success must be built of widespread demand, experience, faith and trust. The development of the railway system in the last century is a good example - a huge explosion of investment and enthusiasm which led to much duplication and waste, but provided the country with a vital network very quickly. Compare this with the laborious, time- consuming bureaucracy of developing the motorway system 100 years later.

From student rooms to luxury hotels
It is an old cliché of international insurance and reinsurance that it is a “people business”. This was emphasised by Julius Neave in calling together the first international reinsurance seminar at the University of Sussex in 1973, with leading reinsurance executives lodged in the student rooms and joining in discussions on current topics. This became a biennial event, outgrowing Sussex and moving to Cambridge and later Edinburgh, until it needed a full-scale conference venue - Harrogate, Bournemouth and Eastbourne. The standard of accommodation also changed! The Grand Hotel, Stockholm, this year is a far cry from the spartan rooms in Sussex; the format of mutual discussion is nevertheless retained, hence the title “seminar”.

Another retained feature is the golf tournament, enthusiastically initiated by Julius Neave and enhanced by a superb silver cup donated by Henry Padfield after he had won the competition in 1977. In those days it was fiercely contested, and at Cambridge in 1979 the weather was equally fierce. There are now 11 names on the cup, including two from the Far East.

The seminar has also provided opportunities to visit some interesting places - Castle Howard, Harewood House, Beaulieu - and hear some eminent speakers. The Archbishop of York and Lord Montegu were particularly memorable in their different ways. The first venture outside the UK, to Dublin in 1997, proved extremely popular - and Irish hospitality lived up to its reputation. Instead of the usual reception by the mayor of the conference town, the seminar delegates were entertained by the Irish government in Dublin Castle.

Some naming problems
The names of the various market bodies have been a mixture of historical accident, current fashion and marginally successful attempts to describe the business. Thus, it is a relief that we now have a name which reflects simply what the association is - one of international insurance and reinsurance companies operating in London.

The use of “office” to mean insurance company has a distinctly archaic feel. Worse, it was usually misinterpreted as “officers”, which was intensely irritating, although the initial “O” provided interesting design opportunities. There was always the possibility of confusion with other organisations, such as the Racehorse Owners Association, and it is amusing to see the ROA still advertised on jockeys' shirts. The formation of the Association of British Insurers (ABI) in place of the British Insurance Association (BIA) also avoided confusion with British Island Airways and the leading caravan company, although it has recently emerged in the headlines as American Bankers Insurance.

Considerable research around the world showed that there was no exact replica of LIRMA (although the Life Insurance Marketing Research Association came close), but the full title was too long and unmemorable, even though it described the business covered. IUA still takes some getting used to, but after the seminar and the annual general meeting, it will become perfectly natural. It has the particular merit of not being tied to the location, and it does not try to define the business by what it is not, such as “non-life” and “non- marine”. Although the Americans like to use “property/casualty”, its initials have several meanings, not all of which are complimentary.

There is no doubting the authority of the new body. Despite a delayed start and the loss of some board members very quickly, there has been no shortage of senior company executives willing to serve on the board and the committees. The present members reflect the range of business transacted by member companies, and include underwriters from several different classes and highly experienced managers. Interestingly, there seem today to be more foreign nationals working in the London market who are willing to take a leading role.

The present profile of the association owes a great deal to Marie-Louise Rossi, who has worked very hard since joining LIRMA in 1994 to make it better known among politicians an regulators in the United Kingdom, the United States, European Commission and other countries, as well as within the industry itself. A significant change in the transformation to IUA is that she became a member of the board itself, in line with modern trade association practice.

It is in a way a bit pointless to say that we are living in a period of change. Was there ever a period when there was no change? Yet the changes in the London market over the past 10 years or so have been dramatic and could hardly have been imagined in the early 1980s. Many would have considered them “unthinkable”. So what among today's “unthinkable” possibilities will become reality in the next 10 years? Many people live in fear of what will happen at the turn of the year, never mind the next 10 years, and one can hardly complain that the date change was unexpected.

But whatever the future holds, the London market has the organisations, the systems and, above all, the people to succeed. It is an exciting prospect - come wind, come rain, come earthquake, come electronic trading - the international insurance and reinsurance community will survive and prosper.

David Holmes is head of secretariat of the International Underwriting Association. He started his career in journalism, moving into public relations for the insurance industry in 1964. He later joined the British Insurance Association, transferring to the Reinsurance Offices' Association as assistant director in 1980. Subsequent mergers took him on to his present position.