Finsbury Ltd

May 20, 2005 11:54 ET

Insurance Brokers And Underwriters Must Invest In Client Industry Expertise And Technical Resources, Says Jardine Lloyd Thompson

LUGANO, SWITZERLAND--(CCNMatthews - May. 20, 2005) - "The insurance industry must invest in the necessary technical skills if it is to achieve the efficiencies in the process and bespoke solutions demanded by major corporations," Mike Hammond, the CEO of JLT Risk Solutions Ltd said.

Speaking to an audience of risk managers, insurers and reinsurers in the global telecoms, media and electronics sectors, Mr Hammond also warned that if the London Market failed to reform itself by becoming more transparent in all of its processes, and not simply broker remuneration, regulators would most likely intervene.

"Investment in the resources and technical skills required today will eventually achieve lower costs in the future, as greater clarity and understanding of the specific risks faced by the telecoms, media and electronics industries will lead to fewer disputes and allow insurers and reinsurers to meet the expectations of clients," Mr Hammond told delegates at the JLT conference, "The Extreme Communications Environment," in Lugano.

Mr Hammond added: "At JLT we are adopting a more discerning attitude to those areas of business in which we participate and we are investing in technical resources to meet what we perceive to be the future demands of our clients and the insurance industry, in general."

Mr Andrew Cornish, the Head of Insurable Risk at UK utility Centrica plc and chairman of the UK's Association of Insurance and Risk Managers said recent changes in the industry brought about by the New York Attorney General Eliot Spitzer's investigation were a "once in a generation opportunity" to change the industry for the better.

"There are many challenges in the risk management world and in 2005 we must grab these challenges and change the market. That will only happen if insurance buyers, brokers and insurers work together to find solutions."

The conference also heard from a number of speakers that bespoke solutions specifically addressing the current and emerging risk issues of the communications, media and electronics industries are possible in today's market place. However, having the necessary technical skills and depth of resources in both brokers and underwriters to build trust and confidence in the understanding of the risk profile of clients is crucial.

Esa Kaunistola, the senior legal counsel for Nokia Corporation said that insurers needed to better understand their customers.

He commented: "They need to underwrite the whole risk portfolio not just line by line. There should also be stability on pricing and global solutions for global companies."

From a personal perspective he said he had been extremely encouraged by the recent commitment that Nokia Corporation had received in designing a bespoke programme for the risks they face.

"The environment to achieve longer term commitment is improving," he said.

Mr Chris Brett, the Group Risk Manager of UK media group, Daily Mail & General Trust plc said that the "extremely archaic practices" prevalent in the insurance industry were a challenge to all those involved.

"We might be prepared to pay more for our insurance simply to get more certainty into the process. We have a real issue with contract certainty and we don't see why we should pay insurers if we do not receive documentation."

Peter Hacker, Partner, JLT Risk Solutions and Global Head of the Communications and Technology Practice Group said: "Insurers, risk advisors and corporates will need to focus more intensely on the entire risk landscape than they have in the past. This will lead to a shift towards more streamlined services and innovative risk financing solutions that really do meet the needs of global clients."

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Jardine Lloyd Thompson

The Jardine Lloyd Thompson group of companies is a leading risk management adviser and insurance and reinsurance broker. JLT is also a major provider of employee benefits administration services and related consultancy advice.

JLT is quoted on the London Stock Exchange and is the largest European-headquartered company providing these services and is one of the largest firms of its type in the world. JLT operates out of more than 100 offices in over 30 countries and employs more than 5,000 personnel. http://www.jltgroup.com

Contact Information

  • JLT Risk Solutions Ltd
    Peter Hacker
    Global Head of the Communications & Technology Practice Grp
    +44 799 077 8732