London’s specialty insurance market will be vital in helping the UK recover economically from the effects of the Covid-19 pandemic according to the chairman of the International Underwriting Association (IUA).
Addressing the association’s annual general meeting Rob Kuchinski, warned that the market the pandemic had heighted the concerns of many corporate boardrooms around the risks they face.
He added that despite the pressure from activists the insurance sector could not simply walk away from fossil fuel risks, rather look to aid in the transfer away from their production and use.
“There is no doubt that the pandemic and previous tough market conditions have heightened Board attention on contract clarity, affirmative declarations of cover and new solutions to reflect a changing, intangible risk profile of clients,” said Kuchinski. “The technical expertise evident within our market is now much better understood and seen as highly relevant to aid UK commerce as we recover economically. Across the world, the risk landscape is changing rapidly. Long term trends such as climate change and the digitalisation of personal and business life are accelerating.
“Events such as the pandemic do not respect borders. The global attraction of London to provide global solutions for multi-national clients has arguably never been stronger. Our market has unrivalled expertise within its ecosystem to respond effectively, and this is an opportunity which must continue to be seized.”
The meeting came as the IUA issues its annual report in which Kuchinski warned there was no simple remedy to the fight against climate change.
“The most important task for us as insurers is to demonstrate that we can effectively transfer and help mitigate the most pressing risks that our customers face; giving them the confidence they require to transact business, or simply live their lives without fear,” he said. “With this in mind the IUA has used this report to discuss issues such as climate risk, pandemic response and cyber threats.
“All are vast topics that require a combined public private effort. It is essential that companies communicate and cooperate effectively with government, risk managers and all other stakeholders and this is where the IUA has an essential role to play.
“Our industry has the data and statistics to support the wider economy in identifying the dangers of the future and navigating a safe path forwards. We must innovate to provide the coverage and services required for the development of new technologies. But such changes will not occur overnight and so we must also play a vital role in managing transition risk.”
On Climate change Kuchinski was blunt as to the challenges it posed.
“Climate change presents obvious challenges,” he explained. “Unfortunately, there is no silver bullet to solve the world’s greenhouse gas problem.
“A blanket move away from fossil fuels by the London Market could simply allow such business to be underwritten less effectively elsewhere. By continuing to be involved in such projects, insurers can be better placed to encourage a swifter transition to greener alternatives.
“At the same time, our member companies need to support that transition via quality insurance products, services, and indeed our vast investment capital.
“The availability of insurance has recently been an issue in many different classes of business. In recent years a sustained hard market has created difficulties in some industries and raised questions about the provision of cover. But new capital coming into our market is a healthy sign.
“London remains a popular location for international business with investors ready to back new ventures in our sector. The continuing growth, both in London company market premium income and IUA membership, are clear indicators of this vitality.”