Tony Markel says control over delegated authority is 'lousy'
Lloyd's still does a "lousy job" at selecting and monitoring its delegated authority business, according to Markel Corporation chief Tony Markel.
In his IIL speech this week, he said Lloyd's needed to tighten its controls when offering the "Lloyd's badge to surrogate underwriters." Around 22% of Lloyd's business is through delegated authority, Markel said.
"Lloyd's needs to introduce the proper vetting procedures and to continually monitor the relationship to make sure it is of mutual benefit."
It is two years since Markel accused the Lloyd's hierachy of suffering from a "pervasive institutional arrogance". But he said that there has been "tremendous progress under the strong leadership" of the present executive board. He also praised the franchise board, and in particular Rolf Tolle, for making an effort to stop concentrating on the "minutiae" of regulation.
But Markel still believes some things must change. He called on the franchise board to scrutinise the use of losses occurring during (LOD) reinsurance that has a "distorting effect on the numbers" and called the service standards at Lloyd's "abominable".
"All the policyholder wants is a policy which states the terms of the contractual obligation and to have his claim paid if agreement is met.
"The last figures I saw reflect an average of 154 days from inception to issue a policy and 42 days from the day the broker seeks settlement to issue payment.
"I'm not suggesting the corporation is ignoring this problem only underscoring it should be correcting it."
