Lloyd's has indicated it may be able to cut the central fund contribution rate a year earlier than expected.
In a letter to market CEOs, Lloyd's director, finance and risk management, Luke Savage said: "I am pleased to say that if events over the next 12 to 15 months pan out in line with our latest assumptions, I believe we will be able to cut the contribution rate in 2008, a year earlier than originally anticipated.
"Such a reduction would of course, be dependent upon factors such as future market capacity, investment returns and, notably, any change in capital requirements arising from the current focus of modelling and rating agencies on the capital needed to support catastrophe classes."
Savage added "In relation to Subscription charges I will be recommending that these are maintained at their current level of 0.5% as, at that level, we will run a modest surplus that gives us a degree of planning flexibility.
These recommendations have been brought to the attention of both the Franchise Board and Council, and we will be seeking formal approval at the September Council meeting. Obviously if anything occurs between now and then that permits or requires us to revisit these recommendations we will of course do so."
