Market must adopt long-term focus

The UK insurance market must focus on underwriting and sound management if it is to survive in today's volatile market, according to Martin J Sullivan, vice-chairman and co-chief operating officer of AIG.

Sullivan urged insurers to "focus on underwriting with terms and conditions that can generate an underwriting profit".

Sullivan warned the London market could become unrecognisable within a year if it failed to address these issues. He said clients need to consider whether insurers have significant capital.

Stephen Crane chairman of the International Underwriting Association and reinsurer Alea: "The Chartered Insurance Institute is very good at providing technical training but the industry lacks good managers, as is pretty obvious from some of the results we have seen in recent years. We need more emphasis on the profession in the top management - it is up to them to get it right."

John Coomber chief executive officer of Swiss Re: "Who invented limited liability? The credit side of the balance sheet is never unlimited - it's a promise that cannot be met in the extreme case. I wish the phrase would disappear from the insurance handbook."

Ron Forrest chairman of Perkins Slade: "What about workers' compensation? This radical solution to the employers' liability problem is not being debated. EL insurance is nearly exclusively sold in the UK, which means employees are forced into an adversarial position where they have to prove employers are responsible. In the US, there is a system of state workers' compensation, often administered by the insurance companies."

Duncan Boyle UK chief executive of Royal & SunAlliance: "I think the leadership problems in the insurance industry have led to a loss of customer confidence. We are in an industry that recycles failure at a leadership level. We need new people coming into the market."