IUA History

 

The IUA was formed on 31 December 1998, through the merger of the London International Insurance and Reinsurance Market Association (LIRMA) and the Institute of London Underwriters (ILU). This union brought together the representative bodies for the marine and non-marine sectors of the London company insurance market.

The ILU's history in the history in the marine, aviation and transport insurance markets dates back to 1884. Senior members of marine insurance companies had, since the 1850s, been meeting informally in the Jerusalem Coffee House and the Jamaica Wine Rooms near the Royal Exchange to discuss policy wordings and other matters of mutual interest. A proposal was made to establish a formal representative underwriting association in July 1882 and two years later the new ILU took up offices in the Royal Exchange Buildings.

LIRMA was formed in 1991 from the merger of previous insurance associations, established in the 1960s and 1970s, to support non-marine insurance business and reinsurance.

 

 

The London Market

 

The 'London Market' is a distinct, separate part of the UK insurance and reinsurance industry centred on the City of London. It comprises insurance and reinsurance companies, Lloyd's syndicates, P&I clubs, and brokers.

Whilst there is no watertight definition of the market, there is general agreement that the core of its activity is the conduct of internationally traded insurance and reinsurance business. This is mostly non-life (general) insurance and reinsurance, with an increasing emphasis on high-exposure risks. There is also, however, a significant amount of life reinsurance activity in London.

Despite the growth of other international centres, London retains its position as the world's leading international insurance and reinsurance market. There may be far fewer companies operating in the market than in the late 1980s, but their average size has increased, and so has the overall level of business.

The London Market's international character is reflected not only in the sources of its business but also in the nationalities of its participants and their ultimate owners. A majority of the companies underwriting in the London Market are foreign or foreign-owned. It is still the only centre in which all of the world's 20 largest reinsurance groups are represented.

 

Insurance in London began well over 400 years ago, and gained prominence in the 19th century, reflecting Britain's then dominant role in shipping and shipbuilding. As the British Empire expanded London developed into a dominant global financial centre. For most of this period, the marine insurance industry was dominated by Lloyd's, but a flourishing company sector also developed and later expanded to embrace emerging aviation and energy markets. By the 1980s, the company non-marine sector had also grown to match the Lloyd's market, boosted by an influx of overseas capital.

 

An important competitive strength of the London Market lies in the number, diversity and expertise of the insurers competing here. Brokers can find the capacity and expertise required for the underwriting of virtually any type of risk. Brokers control most of the business placed in the market. London is largely a subscription market where risks are shared. A key feature is the presence of highly skilled 'lead underwriters' whose judgements on premium rates to be charged for different risks are followed by other insurers in London and indeed other markets across the globe.

Another important attribute is geographical concentration with many insurers and intermediaries located in close vicinity within the City of London. Thus, brokers can know personally the strengths, specialities and reputations of the underwriters and the insurers with whom they deal, and readily tap the combined underwriting capacity for all sectors of the market. Similarly buyers can meet insurers, and market information is spread rapidly among all participants.

 

The London Market also contains an unrivalled pool of service providers, for example law firms, IT support and professional bodies such as the IUA, and a liberal but effective regulatory environment. All of these attributes contribute to an enviable reputation for innovation and security.