London braced for challenges in 2023, in big year for digitalisation

The London market is to focus its efforts on the risk to the global supply chain and the growing threat of cyber-attack or failure to its operation and the International Underwriting Association warns that London faces a range of ongoing and new threats for 2023.

The IUA has published its business plan for 2023, highlighting key challenges for London Market insurance companies in the months ahead, although it believes 2023 will be a “big yeatr2 foe the development of digital processing.

Understandably inflation, is seen as a major threat but there are also warning that the market needs to step up its efforts to meet the need to recruit and train new talent.

The rapid rise in political risks, which have been exemplified by the ongoing war in Ukraine, have put additional pressure on the world’s supply chains and the war has come with a significant uptick in the use of cyber-attacks to destabilise supply chains and businesses.

In response the  IUA’s Cyber Underwriting Group is developing a research paper on supply chain risk, whilst its Claims Strategy Committee will oversee a review of claims agreement procedures that aim to maintain a market-wide standard in claims processing.

Another key theme for the yar is the requirement for greater contract clarity as the market deals with an ever increasing range of risks and with it demand for new types of coverage.

IUA CEO, Dave Matcham, (pic) explained: “The IUA’s mission statement is to secure an optimal trading environment for London insurance companies and all our activities are targeted towards this achieving this outcome. We are catering for a growing number of members as our sector continues to thrive. We are now proud to represent a record 73 different firms.

“Our business plan this year addresses both market cycles facing different classes of business and regulatory challenges such as the scope of the Financial Conduct Authority’s fair value requirements. 2023 is also a big year for the development of digital processing in the London Market as our Joint Venture with Lloyd’s and DXC Technology pushes ahead with designing new services. A new generation placing platform will also be released and a new digital version of the Market Reform Contract.”

The association’s public policy work this year will include monitoring the implementation of a reform package for Solvency II and following a review of the Senior Managers and Certification Regime. A final version is also expected in the year’s first quarter of a supervisory statement on the regulation of branches operated by EU insurance companies outside the trading bloc. Later in 2023 the IUA will be preparing to respond to a forthcoming review of the Insurance Distribution Directive.

The IUA’s business plan also addresses diversity, equity and inclusion policies which the association said it is keen to promote, both within its own organisation and throughout the industry groups that it operates for the benefit of member companies and the wider London Market.

“A charter document will be produced formalising inclusive behaviours and principles for the benefit of all market committee participants,” it added.