Leslie-Ann Giovnilli makes a plea for better communication in London market run-off.

Leslie-Ann Giovnilli makes a plea for better communication in London market run-off.

Communication - where would we be without it? Dare we suggest that we are already without it in the arena of run-off in the London market.

To go some way to rectify the perceived gap between live and run-off entities, our information group, the Association of Run-Off Companies (ARC), was formed. ARC is more than an acronym; it is a suggestion of rescue by weight of numbers and collective action after we have all been dismissed as washed-up, drowning in claims, awash with problems and with staff leaving the sinking ship like rats. I think you get my drift.

The point is ARC would like to get all run-off entities on board to open lines of communication with each other, with brokers and with cedants and generally improve the run-off voice on committees and within groups which are currently dominated by those companies not yet in run-off.

ARC offers an open forum every other month where those attending can raise any issue they wish. If demand is there, a sub-committee will be set up to address the concern and give full feed back. In some cases, it is not that activity is lacking in the London market, but that it is not being communicated to all interested parties.

In my experience in the run-off area, too much time is spent on positioning and not enough on the overriding issue of: "Is this good for my clients/shareholders"? To use a recently popular buzz word: let's talk finality.

If a representative cannot stand up and make a clear argument for his company's stance, for exposure on asbestos, pollution and health (APH) losses, say, then does he have a valid argument? Is it a good position for the company to take? How many of us have wasted time and money employing lawyers and other experts trying to obtain from a reinsurer a valid reason for non-payment other than, for example: "We don't agree on APH losses."

How will run-off, solvent and insolvent, ever reach finality if we do not communicate by dealing with only true contract issues rather than pursuing delaying tactics or contradicting the viewpoint of others, depending on who they are or what mood you have.

If ARC can at least get run-off entities treating each other with mutual respect and providing a service to clients that has true value, then perhaps we can encourage reciprocity from brokers and other companies.

Learning communication

Communication is something we all learn at our parents' knees. It is something, therefore, at our career stage we should be very good at. Our clients may not agree. Certainly, press coverage of insurance is never very positive. Is this because we spent too much time being diverse, rather than looking for ways forward that solidify the market?

A recent approach to Lloyd's by the market organisations LIRMA and the ILU to join the new International Underwriting Association (IUA) of London was one of the most positive communications steps for years. Success on this front would at least allow our systems to talk in the same language. Similarly, progress in the London market network LIMNET can only benefit us all.

ARC itself has opened channels of communication with the ILU, LIRMA and Equitas and hopefully this will continue in the same positive way in which it has begun. We wish to be known as facilitators, not to replace, but to enhance.

The London market has many things still attractive about it and it is still one of the financial leaders in the world market, but it is not moving as rapidly towards one market as it could. Times are changing and the new market will seek faster fund turn-around, quicker decisions and a more uniform view from certain areas of the market.

Do we want to become known as the run-off (dead) centre of insurance by not moving quickly enough? Do we really wish to encourage the view that outside of Equitas, a brave move that has allowed Lloyd's to move forward, there is no collective thought or rationale in the London company run-off area?

Let us make one. Let us use ARC to prepare a strategy for resolution and efficient run-off of all our companies' liabilities, both solvent and insolvent. Let us work together to achieve a greater good and, on the way, a better deal for our companies.

If all it takes is one person to break ranks for others to follow, let us look then at forming ranks. Let us encourage full and frank discussions that allow insolvents to finalise and solvents to clarify their true liabilities. Let us be bold; let us make a giant step forward toward reconciliation of run-off by reconciling our differences and working 100% to resolution.

Leslie-Ann Giovnilli is secretary and administration liaison for the Association of Run-Off Companies. She has worked for 21 years in the London market and specialises in US casualty with a slant on run-off entity requirements.Tel: +44 (0) 171 481 7182. Fax: +44 (0) 171 481 7007.