Modernisation prompts merger of insurance market rivals
Lloyd's and the Company Market will become a combined operation in the next three to five years, predicts the president of Markel International.
In an exclusive interview with Insurance Times, Jeremy Cooke said the implementation of the London Market Principles (LMP), which aims to unite the two insurance rivals through the use of a uniform policy slip and the creation of a single premium and claims processing system, was the first step to creating a unified organisation.
Markel International currently operates at Lloyd's through Syndicate 3000, and also accesses the Company Market through its subsidiary the Terra Nova Insurance Company.
Cooke said although modernising Lloyd's and making it more efficient was the main priority, Lloyd's would need to work with the Company Market to fight off overseas competition.
"In a relatively short period of time we could well end up with one market in London," he said. "It is important that we utilise as much capacity as possible in London to maintain our importance as the centre of the insurance world, especially in view of the recent capital developments in Bermuda and elsewhere."
He said there should be one set of regulatory rules for both markets, instead of participants having to report to Lloyd's and the Financial Services Authority (FSA). He said the benefits of creating one single London Market would lead to capital strength, ease of entry, the combination of underwriting talent and cost savings.
"It can definitely happen within three to five years," said Cooke. "It will happen. The steps taken by LMP are a clear indication the bulk of the market in London wants to create a strong presence."
