Insurance & Broking industry responses to the Mactavish Protocols
Herbert Smith
Alexander Oddy, Partner, Herbert Smith, said:
“The Mactavish report identifies a series of issues around the insurance placing process. What stands out is that these issues appear now to be taking place against a background of dynamically changing risk exposures within insurance buyers’ organisations. Under English insurance law the responsibility for making a fair presentation of the risk falls squarely on the insurance buyer. A failure to do so can put the entire insurance protection at risk. The ultimate objective for all parties in the insurance transaction - buyers, brokers and insurers - should be certainty as to the agreed risk transfer. That is the best way to avoid disputes which are costly, time consuming and serve none of their interests. If the Mactavish Protocols are adopted even in part then insurance buyers are likely to stand a better prospect of getting claims paid when they need it most - at the critical time of a major loss.”
PricewaterhouseCoopers
Richard Sykes, Governance, Risk & Compliance lead, PwC, said:
“Many UK companies are unaware they are facing costly and damaging gaps in their insurance coverage. The risk that an insurance policy won’t pay out is not being recognised by boards. The lack of quality and in-depth information around risk exposure provided by companies to their insurers is currently inadequate and has left many businesses with unreliable and inappropriate cover. Companies need to make more informed decisions about how much risk they should retain or transfer, rather than simply seeking to minimise insurance expenditure. Insurance needs to move up UK companies’ agendas and become a more important part of their wider risk and capital-management plans.”
Willis
James Nicholson, Managing Director, Willis Risk Solutions, said:
“Willis applauds Mactavish’s continued tenacity in challenging the status quo and shining a torch on the fact that we as an industry must be better at demonstrating the immense value insurance provides in supporting businesses. As a change leader, Willis endorses the study’s findings which are in line with our drive to challenge inefficient insurance practices and lead reform through innovation such as our unique carrier benchmarking tool, the Willis Quality Index.”
Zurich Global Corporate UK
Ann Haugh, CEO, Zurich Global Corporate UK, Commented:
“The Mactavish report raises challenges for the insurance sector that Zurich is committed to addressing. We look forward to working with brokers and customers to drive forward its recommendations.”
Axa Corporate Solutions UK
Emmanual Nivet, CEO, AXA Corporate Solutions UK, commented:
“The intellectual integrity and market-wide experience that underpins Mactavish’s Placing Reform Report has resulted in a robust, pragmatic paper which clearly points the way forward for our industry. AXA Corporate Solutions supports the findings of this report which closely mirror our own long standing belief that customers, brokers and insurers must work together in a more informed and co-operative manner than is currently the case. Our confidence in the pertinence of the report is perhaps best evidenced by the fact that a number of our Client Commitments, such as ‘scenario testing’ policy wordings, are based on the report’s findings.”
Aviva Corporate & Specialty Risk UK
Axel Schmidt, Chief Underwriting Officer, Aviva Insurance, commented:
“The placement reform report flags a number of tough yet fundamentally addressable challenges. Aviva Corporate & Speciality Risk (CSR) will be working with clients and brokers to address the report findings and by including them within the Aviva CSR value proposition.”
AIRMIC
John Hurrell, CEO, AIRMIC, commented:
“Mactavish’s research is thorough and convincing, and it lifts the lid on a potential crisis looming in the UK commercial insurance market. Airmic has long argued that the current legal framework for commercial insurance contracts is unsustainable as it requires buyers to anticipate what the insurer may regard as ‘material’ information. Any alleged breach of this rule, even if innocent and unrelated to a particular claim, can lead to an insurer avoiding a policy on grounds of non-disclosure. This research illustrates just how dangerous the situation can be. Mactavish’s proposed remedies are credible and well argued. They align with Airmic’s own work to produce a best practice guide and, with Herbert Smith, to create a remedial clause that provides greater clarity for both parties.”
