Airmic welcomes move
Airmic has welcomed an apparent softening of the EU Commission’s position on the London insurance market, in light of the ongoing enquiry ordered by competition commissioner Neelie Kroes.
Last year Airmic had expressed strong concern that the enquiry appeared to question the way business is conducted in the London market. The EU report highlighted the practice of ‘horizontal co-operation’, where underwriters openly share risks, including terms and prices.
The officials made it clear at their meeting, however, that they are now satisfied on most points. In particular, they are willing to accept the principle of shared wordings on the same risk. The one significant change to current practice that is likely to emerge is the stipulation that the lead underwriter’s price need not be binding on the following market.
Other participants in the risk would be free to compete on price against other potential participants in the layer. Brokers would be required to ensure that this opportunity for competition was made clear to the insurers involved.
Airmic's insurance steering group welcomed the news at its latest meeting. “The EU Commission have listened to the concerns expressed by ourselves and by others and have responded in a positive fashion,” said group chairman Kip Berkeley-Herring. “We believe the subscription market to be pro-competition, a point that we have consistently made to the enquiry.”
