The accounting and settlement project is fine, but where does that leave LMP, asks Eloïse Haigh
When insurers' attention is being grabbed by issues such as liability, IUA chief executive Marie-Louise Rossi is right when she says the formation of the new accounting and settlement (A&S) steering group is not going to grab the headlines.
However, it is undeniably important. The group will oversee the new phase of market reform that aims to speed up cash flow around the market and increase efficiency and transparency - ideas which are very sensible.
A&S is the third phase of market reform we have seen. It comes after the completed bureaux convergence phase, while the high-profile London Market Principles (LMP) project is continuing.
LMP itself has a number of projects in progress including the introduction of standardised slips and a general underwriting agreement (GUA).
Take-up of these central ideas was slow at first, but they are gradually starting to be adopted in the market. So, it will still be some time before LMP is near to achieving all of its original objectives.
So, while A&S is clearly a wise move, is it wise to embark on a new phase before LMP is complete? The move to proceed with A&S appears to signal a lack of confidence in the likelihood that LMP will ever achieve all of its aims. Also, will LMP and its aims fall by the wayside if A&S is a success?
LMP at least means accounting and payment practices are looked at in the market. Rossi backs this up by saying that this is the phase whose aims are most wanted by clients, brokers and underwriters. Hopefully, the London Market will be receptive to this stage of market reform and adopt change more readily than with LMP.
In a time of unprecedented levels of co-operation between the major players, the industry should unite to ensure this project's success.