Lloyd's underwriters have introduced tougher risk control measures for brokers.
The measures relate to line slips, which brokers often use to place a large number of risks featuring similar characteristics. This helps the intermediary to keep pace with the volume of incoming business and enables a more efficient service to the client.
The slip allows underwriters to delegate authority to the leader, the underwriter whose quotation is accepted for a risk. This means the leading insurer can authorise risks on behalf of other syndicates.
Underwriters are increasingly refusing to sign brokers' line slips.
John Muir, chief operating officer of Willis' fine art, jewellery and specie division, which places over 30% of its risks through line slips, said: “We noticed this during the early part of this year, but the events in New York have accelerated it.
“All brokers are going to have to work harder for their clients and, in some circumstances, work more intelligently.”
He added underwriters were only using line slips if a broker could show a track record in excellence, profitability and expertise.
Those that fail to meet these criteria will be forced to place risks individually, which will be more time-consuming and expensive.
“We have found, in certain areas, underwriters have completely discontinued these facilities,” he said. “Where there may be uncertainty, they are making the terms and conditions more onerous on the broker, such as getting the broker to have two leading underwriters [instead of one] to agree to the terms.”
The chief executive of one Lloyd's insurer said: “No one wants to be bound to anything. They want to review whether they will still write the risk and want to see every risk.
“This is not a bad thing, just people wanting to bring underwriting back to control. Everyone stopped underwriting the afternoon of the hijacking while they reviewed the situation.
“Now people are underwriting again, but they want to bring the decision back immediately to their desks, rather than let it be made by a third party,” he said.