Many risks within London are too large for one insurer to assume, therefore they become co-insured and a subscription is formed. The client receives a single contract which lists the terms and conditions and each insurer’s participation.
The practice of the subscription market was a key focus of the European Commission’s recent Business Insurance Sector Inquiry. In particular, the market was invited to respond to potential concerns on premium alignment, ie. when each co-insurer receives a share of the premium quoted by the leader.
IUA has met with the Commission on this point, as have many other Associations. Recent press comment states that the Commission has softened its stance on the subscription market. From IUA’s perspective our meeting was very constructive and provided an ideal opportunity to discuss the Commission’s concerns and demonstrate the pro-competitive nature of the London market which meets the needs of clients – confirmed by AIRMIC in the press stories. Whilst we await the Commission’s final comments, our members remain committed to responding to the placement preferences of clients but welcome the Commission’s understanding of current practices.
By engaging in constructive dialogue there are grounds to be confident that a satisfactory outcome will be achieved.
