BLM partner and head of the broker sector, Helen Devery has commented on a recent report from the Financial Conduct Authority relating to the industry’s handling of delegated authority. According to Helen, it is difficult to assess the exact proportion of business currently underwritten via delegated authority schemes.
“The majority of insurers outsource some elements of their functions and the [FCA] report highlights that the Lloyd’s market received about 30% of its premium income in 2013 through firms that held underwriting authority on behalf of Lloyd’s syndicates.
“Benefits include better allocation of resource across the industry, allowing expertise to be matched to customer needs and tapping into a wider range of resources to help enhance products. There is also the cost benefit of outsourcing rather than recruiting in-house expertise. [But] challenges occur when there is a lack of control and due diligence over the outsourcing, which creates complexities for customers.”
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