Most global insurers and reinsurers do not understand the London Market, says the European managing director of Catex, the world's largest internet-based insurance exchange.

Speaking at an Insurance Solutions gathering last week, Tom Bailey said outsiders believed Lloyd's and the Company Markets operated "with a club-like mentality".

"The London Market is viewed as anathema by many of the rest of the global community, with its peculiar processes, bureau system and standards," he said. "London has been famously described as 'the market of last resort', its share of the global premium pot is falling year on year and recent results have been disappointing."

Bailey added although the London Market Principles (LMP2001) aimedto address these issues and harmonise the City with the rest of the world to trade on an equal platform, implementation would be a challenge.

"It is an uphill struggle trying to convince people to use that technology," he said. "LMP2001 is massively unambitious and will clearly not achieve everything it sets out to do.

"Trying to get everyone to agree standards is impossible, even if you are attempting to get a company to do so internally.

"But it will perhaps get enough momentum going and, as a lot of previous initiatives have failed, it must be pragmatic and not ambitious.

"E-commerce is a big threat, but it's also a massive opportunity. If London can overcome these challenges and embrace technological efficiencies, it could be a very rosy future."

Bailey advised companies to take action now, but to try not to make any sudden movements. He said they should "avoid unilateral initiatives as they have never and will never work".

Catex began as an exchange making a flexible technology standard open to all users with minimal barriers of entry. Users can transfer structure to their clients or indeed develop new markets.