Reinsurers and insurers have been warned that there is a real likelihood that regulators will look to impose tougher rules on the financial services sector in the light of the credit crisis despite much of the blame for the problems laid at the feet of the banking industry.

At a time when underwriters were looking to their cost bases and their underwriting strategies following the eradication of the investment returns which have so long underpinned the market, Chairman of the IUA (International Underwriting Association) Stephen Riley has expressed concern that London could face another wave of insurance regulation.

Speaking at the association’s annual general meeting, he said the market had made tremendous progress in its reform of processes, becoming more efficient and user-friendly, and had become a leader in the use of technology.

However, these efforts would be undermined if it was caught up in the regulatory backlash against the banking sector.

 “The fear is that insurers, who have demonstrated tremendous resilience and strength in recent times, will once again become embroiled in wide-ranging financial services regulation,” he told members. “The key message is that the insurance model is fundamentally different to banking. Therefore any changes to regulation must be appropriate and balanced.”

Mr Riley said it was an extremely busy period for the IUA, illustrating the value of a market association. Independent research among staff at member companies had found high levels of satisfaction. 83% of respondents regarded the IUA as important to their company and 75% felt it was important to their own role. The IUA was overwhelmingly regarded as professional and credible by its members, he said.