Private investors providing much new capital, says FT
Lloyd’s is going back to Names – private investors who traditionally funded the world’s oldest insurance market – to raise underwriting capital, the FT claims.
Amlin raised almost £50m from private investors to fund its new syndicate 6106 in December and the FT claims others are about to follow.
“We are talking to a number of insurers who are interested in raising private capital this way and investors are eager to take advantage of an improving market,” the FT quotes Alistair Wood, head of research at Hampden Agencies, one of the three members agencies responsible for channelling private money into the Lloyd’s market.
“The [Amlin] fundraising took just three weeks from start to finish and the costs were low. This compares favourably to a long timetable and the much higher costs of a public fundraising.”
It also quotes Amlin investor Sir Adam Ridley, former director-general of the London Investment Banking Association who has been a Name since 1977.
“At this stage, I plan to continue to look very actively at the Lloyd’s market as the year unfolds. The improving circumstances in the past four or five months make it quite attractive.”
James Mackay, executive director at Argenta, a members agency, told The FT: “We are seeing almost daily inquiries from investors looking to set up a vehicle at Lloyd’s and start underwriting for the 2010 account.”
Today, about 2,500 Names provide capital for only 17 per cent of Lloyd’s £16bn of underwriting capacity, compared with 100 per cent of underwriting capacity 15 years ago.
In a separate analysis the FT quotes Michael Deeny, chairman of the Association of Lloyd’s Members as saying: “Even Names that have resigned have been calling me and expressing some interest in returning to the market.”
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