Delegated authority is `enemy number one' for the insurance industry, said JTW reinsurance Consultants' managing director.
Julian Ward said delegated authorities were the biggest source of problems within the industry, costing millions each year.
"Lack of due diligence in delegated authority is public enemy number one - bigger than fraud even - accounting for wasted billions of pounds over the years. And the scandal is that no effective preventative action is being taken.
"Delegated authority counts for as much as a quarter of business in the London Market, we estimate, and of that easily 10% ends in tears.
"It's a paradox that the very sector that deals in risk takes more blind risks than is reasonably decent and fair for its stakeholders."
Ward continued: "The problem is that the measures so far introduced in the market place have been seen, in too many cases, as tick box formulas.
"There would be far fewer problems with delegated authority if it were applied to appropriate classes of business, carefully monitored and policed and more regularly audited," said Ward.
"The industry has forgotten the lessons of the past - seeing delegated authority as an easy route to premium income and forgetting to put in the procedures and checks that should be in place right from the start.
"When these measures are in place and problems happen, as indeed they do, then they can be dealt with at the 'issue' stage. In true financial terms, due diligence is the inexpensive way of doing things."
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
