How Lloyd’s new hurdle principle impacts claims – Gallagher Bassett

Effective from 1 January 2026, the Lloyd’s claims management principle was elevated to a “hurdle principle” – a major shift for Lloyd’s claims handling.

This change places the delivery of high-quality claims services among the key fundamental responsibilities of managing agents and highlights the need for strong governance and oversight.

Syndicate ratings will now be directly influenced by claims handling performance. Failure to meet expectations may lead to a range of consequences, including restrictions on underwriting and increased regulatory oversight.

However, high performers can expect to see their maturity ratings and market reputation strengthened.

Managing agents must deliver prompt and fair service to customers and ensure their practices meet regulatory standards.

While claims performance has always been a core market differentiator, the industry now recognises claims excellence as an important attribute, equal strategically with underwriting and governance.

Though managing agents may find the short-term challenging, adapting to an elevated standard and optimising your claims journey is ultimately going to build trust in your supply chain and reinforce your competitiveness.

Looking at the bigger picture, a renewed focus on claims performance could be the key point of difference for the Lloyd’s market.

Ability to grow

With the claims hurdle principle now binding, how managing agents choose to meet requirements and whether they delegate claims operations to a third party administrator will define their ability to grow within the Lloyd’s ecosystem.

For managing agents in need of the resources to meet the new Lloyd’s maturity benchmarks, Gallagher Bassett offers comprehensive claims consultancy solutions to assist with in-house resource, capability and advisory challenges.

The implementation of the claims hurdle principle is an additional pressure added to the modern insurer’s growing list of concerns. Those impacted by the change should not lose sight of the true value of exceptional claims service – positive outcomes.

Lloyd’s principles focus on outcomes, so managing agents need to demonstrate that they’re meeting benchmarks and continually exploring ways to improve their service – and that’s where Gallagher Bassett can help.

We are a trusted provider of tailored service, data-driven insights and operational resilience. We have recently expanded our capabilities into new markets, like marine, and are well positioned to elevate our clients’ claims functions so that they’re not only meeting, but going above expectations.

• For more information about Gallagher Bassett’s Claims Consultancy Solutions, visit the website.