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The first local authority insurance company to be set up in more than a century has opened. London Authorities Mutual Limited is regulated by the Financial Services Authority and had to meet a set of tough criteria, as well as securing £160,000 in funding from the London Centre of Excellence (LCE), before its official launch. The company is owned by member authorities, with profit retained for their benefit. There are no shareholders. The scheme has been led by Croydon LBC, and is open to all 32 London boroughs, as well as the City of London and Greater London Authority. Brent and Harrow LBCs have already placed their insurance business through LAML, and the remaining eight founding authorities – including Camden, Croydon, Hammersmith and Fulham, Haringey, Islington, Kingston, Lambeth and Tower Hamlets – are expected to join in following few months. ‘LAML is without precedence and represents a fresh injection of competition in the market,' said Nathan Elvery, chair of the board of directors and Croydon LBC treasurer. ‘I am confident it will provide an excellent service.' The insurance company also aims to raise standards of insurance practice in councils by recognising good management of risk, and rewarding those pursuing effective risk-management strategies. Ken Cole, director of LCE described the insurance company as an ‘innovative project' and said: ‘The key to reaping the full benefits of the mutual is participation as the more authorities that participate the greater the benefits will be.' According to the LCE, LAML is offering cover up to the total sum insured in respect of assets covers and up to a limit of £50m any one occurrence in respect of liabilities, with sub-limits of £10m in respect of the ancillary liability covers. A group of 28 councils participated in a feasibility study at the end of 2005 which revealed a mutual insurance company owned by London authorities could generate significant savings on premiums.

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FINANCE

Council insurance firm opens for business

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