London market brokers support change but fail to act, says report
London market brokers which say publicly that they are pushing ahead with electronic reform may not be doing so in practice, according to a report released this week.
The survey found that the aims of management in driving electronic reform are not being met with action by the staff responsible for change.
Furthermore, the insurance market appears to be apprehensive about implementing electronic trading systems, according to the Ernst & Young survey of London market chief operating officers.
The report comes as the London market remains behind schedule in the implementation of key electronic reforms.
“The chief operating officers (COOs) largely agreed that although brokers were publicly supportive of change, privately their actions were mixed,” the report said.
“While the COOs noted the strong lead that brokers had taken in pushing reform forward in terms of their market statements, they were less convinced that the day-to-day actions of the employees were supportive of market reform.”
The report added: “The COOs perceived that a clear dividing line had emerged within broking houses between the aims of management to support market reform and those on the ground responsible for implementing change.”
The market reform group (MRG), which is responsible for London market reform, remains behind schedule in the full implementation of electronic claims files (ECF) and accounting and settlement repository (A&S) programmes.
Nevertheless, 73% of chief operating officers were positive about the influence of the MRG and 91% were positive or very positive about the now-disbanded G6’s [a group of six top managing agents] influence on driving electronic reform in the market.
Overall, 82% of chief operating officers were positive about market reform progress. But when asked whether peer-to-peer electronic placing will have a significantly positive effect on the London market, only around a third of chief operating officers agreed or strongly agreed.