Moore Stephens Insurance Industry Group News

consultancy to assess risk. foundations. Now is not a time for being wise after the event. insurance can de designed and sold on price alone. "The best insurance is a combination of commercial acuity, actuarial perception, technical awareness, intuition and luck. Many underwriters and brokers make use of financial and actuarial consultancy to assess risk. don't. Today, those services are more valuable than at any time in history and the good news is that software tools today facilitate the ability to analyze data in ways that were simply not feasible in the past. "Underwriting in ignorance of the true nature of risk and of potential and aggregate liabilities can no longer be considered a viable option.

Insurance accountant and consultant Moore Stephens has joined with international law firm Clyde & Co to provide specialist advice to intermediaries on all aspects of the authorization process and on continuing compliance with FSA requirements. The rigorous FSA regime comes into effect on January 15, 2005. Intermediaries have until July 14 this year to submit their completed registration packs to the FSA. The new rules are not voluntary. licensed by the FSA. John Harbor, head of the Moore Stephens Insurance Industry Group, says, "Most intermediaries will need to begin the registration process two-to-four months before the July 14 submission date in order to prepare the information needed to secure successful authorization.

Moore Stephens has warned UK insurance brokers that failure to submit their applications for registration by the Financial Services Authority (FSA) by the due date of July 15 this year will mean that they will not be authorised to carry on business from January 15, 2005, when the new FSA regulations come into force. The FSA published its final conduct of business rules on January 20 this year. And there is evidence to suggest that, despite the looming deadline for application, many brokers do not yet fully realise the extent of the detail and the depth of the information they are required to provide to the regulators. Indeed, in some cases, there is reason to believe that the need to be FSA-approved is not properly understood.

Regulatory developments mean that failure to make proper use of business intelligence systems and actuarial consultancy to assess risk could lead not only to significant financial losses but also to disciplinary penalties for insurance underwriters and brokers, according to leading accountant and consultant Moore Stephens. designed to support the development of effective reserving and forecasting procedures. They are now an essential part of insurance industry practice. analytical and risk management services. Steve Downing says, "The insurance industry must embrace a centralized approach to risk management, one which has the ability to analyse data in a flexible way, to search for trends and patterns, to analyse productivity and to help business planning and forecasting.

Moore Stephens say there are big gaps in the U.K. insurance industry’s application and understanding of FSA requirements on contract certainty. While acknowledging that a lot of work has been put in by the London Market Reform Group, among others, Moore Stephens says the target of achieving between 75 and 80 percent compliance looks optimistic, at best. The FSA is to review the industry’s performance and it is understood that later this month it may decide to adopt a more rigorous approach to enforcement. Moore Stephens Insurance Industry Group partner Simon Gallagher says that firms should be monitoring their progress in terms of trying to meet contract certainty targets.

financial reporting for publicly traded companies in the EU will mean that the insurance industry will have to develop a much sharper focus on actuarial processes and claims run-off projections. The IASs are due to be introduced in the EU during 2005. been gestating since 1997. potential source of problems for non-life insurers. outstanding claims liabilities and settlement patterns. MVMs are to be calculated. different classes of insurance. some non-life insurers. recorded and recognized at the time a contract is written. underwriting results from the year of contract inception. business. products will need to be re-examined. accounting standards.