The underwriting agencies sector is gaining strength as agencies align their advantages to complement the role of insurance companies, according to Pen Underwriting CEO Paul Lynam.

Speaking after being given a lifetime achievement award by the Underwriting Agencies Council (UAC) in Sydney last week, Mr Lynam said UAC is “well positioned to be the beneficiary of a market that will change rapidly over the next 10 years”.

“I believe insurance companies will more and more manage capital while the underwriting agencies will manage risk,” he told the audience at a luncheon following the annual underwriting agencies expo.

“You can already see this happening, where the agency sector is building data and getting into a stronger position to take the front foot on underwriting management.

“Back-office processing will be carried out more efficiently under the managing general agency model, and insurance companies will be able to fix their costs and concentrate on managing capital with small sophisticated teams.”

Mr Lynam sold his company SRS to Arthur J Gallagher in 2012. The Australian operation is now part of Gallagher’s global Pen Underwriting.

He says he placed his first piece of business into the Lloyd’s market 27 years ago.

“Underwriters recorded the entry on a card; there were no laptops,” he said. “Now we are talking about full life cycle policies, end-to-end policy management and ‘owned distribution’.

“I would estimate 65% of the gross written premium in the expo room today is owned by listed companies.”

UAC GM William Legge told insuranceNEWS.com.au the award recognises Mr Lynam’s “strong support in helping set up UAC and providing continuing support”.

“Paul is a foundation member and has been chairman of the council twice,” he said. “His support has been very important to the success of UAC.”

The award has only been presented twice before, to fellow foundation members and former chairmen Bob Lee and the late Roy Ellis.