Workload increases in anticipation of UK switch to new currency
Introduction of the euro has moved from an "if" to a "when" proposition, according to major insurance companies.
Because of the change in perception of euro convergence over the past two weeks, top insurers including Aviva, Royal & SunAlliance and AXA, have started preparing detailed studies into the impact of the euro on their UK businesses.
Aviva head of business change Jack Norton said: "Since the merger we have left it alone, but we're beginning to wake up now."
Norton added that Aviva is starting detailed talks with client banks and building societies, which are understood to be ahead of insurance companies in their preparations for euro conversion.
Norton said: "We have a company assumption that we will have a referendum next year, either May or October. We're assuming it will be May and we're assuming a "yes" vote and that we will join early in 2004."
Norton explained that euro convergence will have a multi-million pound cost for the insurance industry.
"We have to analyse every single field, every single process, to identify the euro changes from sterling. We have to plan changes to all the systems and processes, re-educating people to a full understanding across every single process."
Accenture partner Nick Miekle said the amount of euro work being undertaken is growing rapidly. He said the main focus of insurance companies is in making sure technology can deal in euros. He added that the problem is more than just stripping out pound signs and replacing lines of programming code to deal in euros. He added that insurers must look closely at how they deal with their intermediaries.
Association of British Insurers (ABI) euro expert Nigel Peaple said insurers are looking at producing guidance on how to deal with intermediaries over the euro.
Jenny Margetts, EMU project manager for UK commercial at Royal & SunAlliance, said that another key impact is staff training.
"It affects everybody in terms of the transition period, knowing how to deal with policies or payments in euros or in sterling. What do you do if someone's filled out a policy in sterling?
"We're just trying to identify as many of these issues as possible at the moment."