Lloyd's deputy chairman calls for market to focus on underwriting
The ban by the European Court of Justice on using gender as a factor in underwriting was “very disappointing”, Lloyd’s deputy chairman Graham White told delegates at the MultaQa conference in Qatar this week.
In a wide-ranging speech at the conference organised by Insurance Times’ sister title Global Reinsurance, White urged the industry to focus on underwriting discipline.
He said: “The key [to stability in the market] is the accurate pricing of risk. The recent ruling by the European Court of Justice, which prevents insurers from using gender when pricing risk, is very disappointing.
“Motor insurers will no longer be able to quote a higher premium for young male drivers than for young female drivers – even though the former pose a higher risk.”
White said that notwithstanding the ongoing tragedy in Japan, “there is no moral or financial value in waiting for a market-turning event – we must always look to be better".
He said: “This is a moment of opportunity to get back to basics.
If rates are low and investment income is hard to come by, then a clear spotlight focuses on underwriting.”
White said that the property and casualty (re)insurance industry has made an underwriting profit just five times since 1975, adding: “An entire generation of underwriters has grown up working in an environment where it is not necessary to derive a profit from underwriting.
Well ... it is now.”
White’s speech followed comments in parliament by Treasury minister Lord Sassoon this week, in which he expressed the government’s disappointment with the European Court of Justice ruling.