Concerns over a ’conflict on interest’ has been raised by several brokers in the market
Brokers and event organisers have criticised the delayed government-backed £750m live events insurance scheme due to a “conflict of interest” as well as its costs and limits on cover, reported the Financial Times.
Multiple market participants approached the publication last week, saying they had yet to see the final policy wording.
This lack of progress has subsequently left event organisers unsure whether they will be able to secure coverage.
The government’s framework document for the initiative, published in September, confirmed that it has contracted Oliver Wyman – the management consultancy arm of Marsh McLennan, the professional services group - as the administrator.
This scheme was meant to be in place from last month to help support the live events industry, which was particularly hard hit during the Covid-19 pandemic due to connected lockdowns.
Market participants have also learned that the new scheme is to be delivered by Marsh Commercial – part of Marsh McLennan’s insurance broking division.
As a result, brokers of event cancellation insurance at four different companies have raised concerns over conflicts of interest given their competitive relationship with Marsh, one of the world’s biggest insurance brokers.
Several brokers have also expressed dismay that the scheme has been handed to one of their biggest rivals to administer.
A spokesperson for Marsh Commercial said: “Marsh Commercial has long-established policies and procedures to manage any potential conflicts of interest appropriately and in accordance with regulatory guidelines. In the case of the UK Live Events Reinsurance Scheme, this includes a dedicated team working only on the scheme’s administration and using a ring-fenced IT platform. These procedures were shared with market participants shortly after details of the scheme were announced.”
Insurance Times has contacted Oliver Wyman for comment.