Putting business through a captive syndicate can be cheaper at Lloyd's than at other major international insurance markets, a report published today reveals.
The report, written by the Risk and Insurance Research Group and commissioned by Lloyd's, compares the cost of establishing a captive syndicate at Lloyd's with four other peers: Bermuda, Dublin, Guernsey and Vermont. Entitled Lloyd's Captives: A Competitive Alternative, the report shows that costs at Lloyd's for a "typical" portfolio of business are generally lower.
The comparison is based on a hypothetical captive established on January 1, 2000 and operating over four years. The figures show clearly that Lloyd's is competitive with the more established captive domiciles, and becomes increasingly so over time.
Speaking at today's PXRE conference on captives in London, Chris Aujard, Lloyd's head of development projects, said:
"While Lloyd's doesn't claim to be the lowest cost option in the world for establishing a captive, this report shows we're highly competitive – especially in the light of the considerable additional benefits a Lloyd's operating base can bring.
Lloyd's is a relative newcomer as a captive domicile, but with time we expect the number of applications to Lloyd's to increase as the multinationals become more aware of the benefits we offer."
The table below, taken from Lloyd's Captives: A Competitive Alternative shows the comparison of cost ratios for a captive established in each of five domiciles. The comparison shows the ratio of total annual cost to gross premium income, net of brokerage and tax (the cost ration), for each domicile during each year.
| Year | Lloyd's | Bermuda | Guernsey | Dublin | Vermont |
| 2000 | 5.9% | 6.2% | 6.2% | 6.2% | 5.9% |
| 2001 | 4.9% | 6.1% | 6.2% | 5.7% | 5.9% |
| 2002 | 3.8% | 6.1% | 6.2% | 5.7% | 5.9% |
| 2003 | 3.6% | 6.1% | 6.2% | 5.7% | 5.9% |
Copies of Lloyd's Captives: A Competitive Alternative are available from Trudie Ringrose at Lloyd's on 0171-327 6224.
