IUA Chairman Tim Carroll, Chief Executive of ERC Frankona Re UK's non-life operations, says the moment of truth is approaching.
It would be interesting to speculate on the nature of the main topics of discussion when reinsurance executives gathered for the first international seminar in 1973. Our industry changes with such speed that 28 years ago seems like a world away.
One thing that remains the same is the desire of senior executives from across the business to meet occasionally to discuss the big strategic developments that affect them. The Gleneagles event is the fifteenth in a series started by the Reinsurance Offices Association, one of our forerunner organisations. Did delegates at the original seminar anticipate the transformation of their industry that lay just over the horizon? Almost certainly not.
It is, therefore, with some humility that we approach the 2001 event in a spirit of investigation into what the future may hold. We will explore the way traditional boundaries are being eroded – between insurance and reinsurance, between reinsurance and the capital markets, between Lloyd's and the companies, and between different parts of the globe.
At the 1999 seminar in Stockholm, Michael O'Halleran of Aon questioned whether or not we should use the term ‘reinsurance' at all. This theme is taken up by our first debate, entitled ‘Redefining insurance and reinsurance'. We shall be looking at such issues as e-commerce, the world wide web, whether we are entering a virtual global industry, and what the implications may be. We shall consider the future of the London market, its role going forward, and to what extent Lloyd's will be able to retain the features that make it different. And we shall examine some of the techniques and approaches that are being used increasingly in the borderland between banking and insurance and reinsurance.
One obvious change since these seminars began is the sprouting of publications, both traditional and more recently electronic, that specialise in insurance and reinsurance. It is sometimes as if the number of journals rises in inverse proportion to the number of entities that they are reporting. Nonetheless, this profusion is welcome. At its best, the media plays a highly constructive role in reporting the news, whether bad or positive, and the stories behind the news. I am delighted, for example, that this edition of Global Reinsurance devotes considerable space to the continuing reforms of the London market through the IUA-Lloyd's Forum and the LMP 2001 initiative.
Getting the London market right has been likened in its complexity to cracking the human genome. There can be no question of the importance of what we are trying to achieve or that our reforms have broad support throughout the London market. As Adrian Ballardie points out in his article, even those London company operations that have not signed up to LMP 2001 have indicated that they support the thrust of what we are doing, and will try to play their part.
The reform process is now approaching its moment of truth when the theory has to be put into practice. The results may take time to feed through into the greater efficiency and transparency that we all desire, but I am confident that London will become a better place to conduct our business. This London reform process is, however, just one part of the much bigger story of rapid and accelerating change. Assuming that these events continue to be a regular feature for another 28 years, what will delegates be discussing at the thirtieth seminar? Will the reinsurance industry as we now know it still exist?
Such questions may be a long way from our immediate concerns, which have more to do with the state of the market and how we can secure a reasonable return for our shareholders in the face of conditions that continue to be highly competitive. In the long run, however, those companies and individuals that possess a clear idea of the big picture and how it is changing will succeed over those who do not. I hope that the debate we stimulate, the discussions that we have with our colleagues from other parts of the industry, and this edition of Global Reinsurance will make a small contribution in that direction.