Research conducted by Xchanging has estimated that the London Market Bureau is collectively saving market participants at least £150m annually.
Presenting the Value of the Bureau research findings to the London Market Group Forum in the Willis Auditorium yesterday, Max Pell, managing director of Xchanging’s UK insurance business, said the detailed study, which involved representatives of the company market insurers and managing agents, showed the main drivers of the savings were economies of scale and doing things ‘once on behalf of the many’. This results in companies requiring significantly fewer staff to service insurance business that is placed through the bureau. The study also showed value being further derived from the central utility as it reduces the need to duplicate IT infrastructure within the individual participants of the bureau. Initiatives such as ECF have also dramatically improved operational efficiency, taking less than half the time to process than paper-based claims.
Although the Bureau was originally designed 25 years ago Pell said the underlying process design remained fit for purpose and that the bureau had developed a rich functionality over time which a future re-fresh of the underlying technology would look to emulate.
Regarding the future Pell also spoke of the increasing market desire for a global solution, citing recent public comments by Steve McGill, group president of Aon PLC that “We need systems that allow us to operate in a consistent manner globally”. John Charman, Axis Capital founder and former CEO also cited “the need for a global clearing house for insurance”.
Pell also praised the work of the London Non Bureau Group: “Generally, outside the London market bureau, accounting and settlement processes are highly dysfunctional. The work of the Non Bureau Group has already delivered significant benefits to the participant brokers and carriers and could be the basis for a new global utility that would meet the needs of both London and the wider global insurance community “