Zurich London chief executive Martin South's call for a single industry-wide utility company for the collection of premiums and risk data (10 April, Insurance Times) is to be welcomed.

At a time when insurers are trying desperately to reduce their expenses, any initiative that could help to control costs must surely be worth consideration.

Furthermore, moving such 'no-brainer' activities - as South calls them - away from insurance companies would free-up valuable time and resources, enabling them to concentrate on more important things, such as underwriting.

However, I fear that a potentially good idea will fall on deaf ears. The insurance industry is woefully poor at collaborating. Just look at the problem of flood insurance.

The larger insurers, who can afford to have their own flood data, have no desire to work with the smaller insurer who cannot afford to compile such vital information.

Granted, there are arguments surrounding the commercial sensitivity of flood data, which are not present in the case of premium collection.

But it does demonstrate the great difficulties that must be overcome whenever industry-wide co-operation is suggested.

A further reason why a utility company is unlikely to find favour is the scepticism that the industry shows to outsourcing. Insurers are in general loathe to relinquish control of their business functions to another organistion.

This is particularly true of the larger insurers who feel that they have the skills and resources to perform the function themselves. The smaller insurers, on the other hand, are often more open-minded.

If an industry-wide utility company is to take off, the momentum is likely to come from the smaller insurers. In the past they have shown themselves to be more progressive and open to new ideas and ways of working.

I hope they continue in this vein.

Dean Smith

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