Lloyd's is on the turn, again. A revolution that saw the number of Lloyd's Names drop almost tenfold from 33,000 at its peak to just fewer than 3,300, has come to a grinding halt. Now the counter revolution has begun.
The newest syndicate on the block is heavily Name-friendly, with nearly half the total funding coming from individual members (as Names are now called) rather than corporate capital.
This is in contrast with the roughly 80:20 split between corporate and member funding in the market as a whole.
What is good about this situation is the confidence it brings to the market. When wealthy individuals – perhaps wary after
the early nineties losses and the personal fortunes names lost then – return to the market, it has to be taken seriously.
The shift could also signal a change in performance for the troubled market, still underperforming and struggling to make profits.
And that is important for the industry as a whole. The UK insurance industry owes a debt of gratitude to Lloyd's. The unique working environment that Lloyd's provided, with its freedom to innovate, has often driven the rest of the industry.
Products developed at Lloyd's to meet a particular client's needs to cover a particular broker's clients have often gone on to much wider usage and distribution. Without that innovation, the UK and global insurance industries would be much worse off.
Returning confidence in the market bodes well. It means the sweeping changes in the market can now be put behind us and the underwriters can be freed to get on with what they do so well – innovating.
Everyone stands to gain.