IUA to work further with Airmic on wordings and contract clarity
UK and wider European risk managers will be pleased to hear that the International Underwriting Association (IUA), which represents 73 London market insurers, has pledged to focus on policy wordings and delivering better contract clarity this year.
The IUA and the Lloyd’s Market Association (LMA) play an important role in the development of market standards and wordings to try to bring transparency and greater clarity to what can be a complex market for customers.
The IUA recognised that problems emerged over business interruption wordings following Covid-19 lockdowns, which demanded a more joined-up approach between carriers and insureds.
The body reached out to UK risk management association Airmic and brokers last year to seek greater clarity over wordings as they are developed, in a move that could only be welcomed by risk managers.
The good news is that the IUA pledges to continue this strategy into 2023.
“The importance of contract clarity and effective policy wordings has been demonstrated repeatedly in recent years, for example in Covid-19 business interruption coverage, cyber warfare policies and the prospect of automatic terminations due to a nuclear detonation,” an IUA spokesman told Commercial Risk.
“At the Airmic conference in 2022 the IUA hosted a wordings masterclass for risk managers to explain policy wording principles. This session will be repeated in the coming year for the benefit of market professionals generally,” he added.
“We will also be working more closely with Airmic, participating in a regular special interest group on wordings run by the organisation. In order to encourage widespread acceptance of new model wordings, both brokers and risk managers will be invited to get involved in the drafting process,” continued the IUA spokesman.
The IUA’s Banks Underwriting Group will also be working on a new financial institutions handbook. The spokesman explained that this is a sector with many historic policy wordings that were originally introduced by individuals rather than associations. “It is intended that a document will be produced for each of the main areas that underwriters need to consider when writing financial institutions business. These resources will be hosted on the IUA website,” he explained.
The focus on contract clarity forms part of the IUA’s business plan for 2023. The other key areas will be helping the London market rise to the challenge of inflation and the need to recruit and train new talent. The IUA is also focused on trying to make the London market more digitally efficient for the benefit of customers and brokers.
The IUA’s Cyber Underwriting Group is developing a research paper on supply chain risk, while its Claims Strategy Committee will oversee a review of claims agreement procedures that aims to maintain market-wide standards in claims processing.
Dave Matcham, chief executive of the IUA, said: “The IUA’s mission statement is to secure an optimal trading environment for London insurance companies, and all our activities are targeted towards this achieving this outcome.
“Our business plan this year addresses both market cycles facing different classes of business and regulatory challenges, such as the scope of the Financial Conduct Authority’s fair value requirements. 2023 is also a big year for the development of digital processing in the London market as our joint venture with Lloyd’s and DXC Technology pushes ahead with designing new services. A new generation placing platform will also be released and a new digital version of the market reform contract.”
Matcham further explained that the IUA’s public policy work this year will include monitoring the implementation of a Solvency II reform package.
The IUA’s business plan also addresses diversity, equity and inclusion policies that it is keen to promote, both within its own organisation and member companies. A charter document will be produced formalising inclusive behaviours and principles for the benefit of all market committee participants.
