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One of the unique historic selling points of the London market has been its back office bureaux.

These have provided the market with the administrative firepower to make London into the only true (re)insurance clearing house that currently exists in the world.

Of course, until 12 years ago there used to be two rival bureaux competing for business and resources and only a few years prior to that there were three.

By the early 1990s it was clear that something had to give, lest the market's rivalries cut off its collective nose to spite its face.

It was only when the market came together to combine forces with the help of Xchanging that some of the real benefits of having common systems could begin to be properly realised.

Even a decade previously the rivalry between the "company market" and Lloyd's meant that such a move would have been unthinkable.

However, everything changes. Lloyd's re-emergence after the Reconstruction & Renewal process in 1996 and radical changes to the regulatory landscape with the birth of the Financial Services Authority eventually made the distinctions between company and Lloyd's markets almost irrelevant.

Rival systems made no sense and the sides called a truce and decided to join forces rather than risk destroying each other.

Now, 12 years into the new-look London market world change is afoot once again. Improvements to systems are on their way, but they are complicated by numerous legacy issues.

IT systems are subject to the law of diminishing returns and sometimes it is better to throw everything out and to start afresh with a new way of doing things.

You certainly wouldn't start a global insurance exchange with the systems London currently uses.

At the same time, pushed by Lloyd's Project Darwin, the market is looking to redefine its relationship with Xchanging.

This is why Xchanging's Netsett global accounting and settlements initiative is potentially so significant (see page 3 opposite).

This is the first time anyone has tried something so properly, audaciously global since the big brokers joined forces to push the ill-fated World Insurance Network back in the late 1990s.

For such a system to work it would require around 80 percent of the global insurance market to sign up and start using it.

And here is where it begins to get interesting. Just as through the 1990s London became more united, so throughout the noughties the entire global insurance marketplace has become more cohesive.

In today's insurance world almost everyone is operating almost everywhere, (or is about to be).

At the same time the development of internet systems, cloud computing and universal data standards are making the back office business of running complicated global financial institutions a lot more efficient.

It's clear that if the Netsett gambit pays off and a significant majority of global insurers start using it to settle their trades, there will be very little long-term need or desire to maintain a parallel or rival London bureau.

We opened by saying that one of the unique selling points of the London market has been its back office bureaux - and indeed historically they were.

It is increasingly likely that at some point in the future the need or desire to differentiate administratively between London and the rest of the world will become an irrelevance.

Once a practice ceases to be a comparative advantage it is time for that practice to end.

Perhaps, paradoxically, in an era in which London is looking to spread its influence further in the world, such a recognition could in fact herald the dawn of a new age of relevance for the market.