“Now, here, you see it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that.” Dieter Losse finds food for thought in Lewis Carroll's Through the Looking Glass.
What better words to illuminate the theme of the International Underwriting Association's (IUA) conference could one expect to find - even in one of the most quoted works in the English language! The sense of the superhuman effort needed to move our industry from where it is to where we perceive, perhaps somewhat darkly, it ought to be, is one with which we can all identify.
Some things on our agenda are relatively simple but need determination to overcome the narrow politics which constantly frustrate their achievement. Information technology rightly has an important slot in the programme. It is blatantly obvious to the external commentators on our industry that we need urgently to address the electronic infrastructure of our global business to develop common standards, inter-operability and inter-connectivity between systems in order to eliminate unacceptable cost structures and facilitate global business flows. The convergence between the LIMNET, RINET and WIN networks is an historic, strategic move and we must now, each one of us, through active membership of and participation in the initiative, secure the practical and positive benefits which are now open to us.
Within the London market, there has recently been a transformation of attitudes and a realisation that through more open communication, the way is cleared for co-operation on non-competitive issues, such as the administrative structures which underpin our trading. In a Europe where competing stockmarkets have concluded that they must merge operations in order to respond to the legitimate demands for efficiency and ease of transaction from global clients, it is unacceptable that anything but a unified and cohesive approach to the provision of administrative services should prevail throughout the whole London insurance and reinsurance market. Attitudes have changed, yes, but our implementation process needs to accelerate. We must run twice as fast!Challenges to the traditional ways of doing business abound and the Stockholm meeting plans to consider them. There appears to be no such thing as “state of the ART” - unless it is in the steady evolution of products through a growing understanding of how the thinking, the techniques and the products of the financial markets can be applied to the solution of risk situations, hitherto the sole prerogative of the insurance and reinsurance markets.
The major buyers of protection from our markets and the managers of global risk require innovative and flexible products. We in the City of London are almost uniquely placed to respond to them, given the physical proximity of the various financial markets and the traditional insurance and reinsurance markets, and the ready access to the necessary legal and accounting skills. Above all, we understand insurance risk, which remains core and is certainly not eliminated simply because a more holistic approach to the management of corporate risk is adopted.
This brings me neatly to the theme of my presidential address to the Insurance Institute of London last October: the importance of intellectual capital to the future prosperity of our market. In a world where business flows virtually unimpeded across national frontiers, it is intellectual capital that is the most powerful magnet for capital and for customers. Recognition of its value has a profound influence on the way we manage our businesses to stimulate innovation and on the way in which we recruit, train and motivate our staff. The knowledge and skills we require, and the qualifications that are appropriate for our industry in future all need careful thought. And then we need to do something about it. We need to run faster!
If we can address these issues and act, the prospects for our industry are exciting beyond measure. In London we are expert at making deals and at concluding transactions, and we are embarked on a path of cross-market co-operation which can bring huge efficiency benefits to keep us competitive. Through the merger of company market association LIRMA and marine market's ILU, the International Underwriting Association has made a significant step in the right direction. In our fast-changing environment, however, we need already to be planning the next steps, and we need to develop and hone our professional skills. The biannual seminar of the IUA is an important part of this whole process.
Dieter Losse is president of the Insurance Institute of London and deputy chairman of Benfield Greig Group. He is also chairman of LIMNET.