30 March 2007

First Local Authority Insurance Mutual in a Hundred Years Goes Live

History will be made on Sunday 1 April when the first local authority insurance company established in over a century goes live.

The fruit of two years' hard work and after meeting a set of tough criteria laid down by the Financial Services Authority (FSA), the London Authorities' Mutual Limited (LAML) will be open for business.

The London boroughs of Brent and Harrow will be placing business with the company from day one while the eight other founding authorities will follow over the coming months.

It's been established, with funding from the London Centre of Excellence, in response to concerns about the limited number of local government insurance providers and the difficulties authorities in the capital face in achieving best value for their insurance premiums.

The mutual aims to bring down the costs of premiums by as much as 15% in a market dominated by just three providers until now and forms part of the government's wider efficiency drive for local government.

The business is overseen by a board of directors and subject to the regulatory regime of the FSA. Ownership of the mutual is vested in the participating authorities - there are no shareholders - and underwriting profit is retained for the benefit of the authorities as members, not third party shareholders. Its core business is property insurance, employer and public liability and acting as an intermediary for motor insurance.

LAML also aims to raise standards of insurance practice in local authorities by recognising good management of risk and rewarding those authorities that pursue effective risk management strategies.

Chair of the Board of Directors and LB Croydon Borough Treasurer, Nathan Elvery, said, "LAML is without precedence and represents a fresh injection of competition in the market. It's underpinned by a robust business platform and subject to a tough regulatory framework. I wish to express my thanks to those who have worked so tirelessly to put this in place and I am confident that it will provide an excellent service to its members."

Ken Cole, Director of the London Centre of Excellence, said, "This is an innovative project and shows how well local authorities can work together with the aim of generating efficiencies and raising standards of practice. The key to reaping the full benefits of the mutual is participation as the more authorities that participate the greater the benefits for those participating will be. I'm sure both local government and the wider insurance industry will be watching developments closely."

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Notes to editors

1. LAML is open to all 32 London boroughs, the Corporation of London and the Greater London Authority. The project has been funded by the London Centre of Excellence and led by the London Borough of Croydon.

2. The founding members of the mutual are the London boroughs of:

Brent
Camden
Croydon
Hammersmith and Fulham
Haringey
Harrow
Islington
Kingston
Lambeth
Tower Hamlets

3. Funded by Communities and Local Government, the nine Regional Centres of Excellence are the lead change agents for local government efficiency. They are supporting councils to secure millions of pounds in efficiencies that are being re-invested in better front-line services. Uniquely placed to bring councils together, they are run by local government, they bring additional capacity and are results focused.

Contacts

Seth Brook
National Communications Manager
Regional Centres of Excellence
020 7944 3300 ext. 19241
07976 109192
seth.brook@rcoe.gov.uk

Nathan Elvery
Director of Finance and Resources
London Borough of Croydon and Chairman of LAML
020 8760 5781