The trial forms part of the market’s Future at Lloyd’s strategy
The board of the Lloyd’s Market Association (LMA) has confirmed that the two classes participating in the modernised syndication pilot, as part of the Future at Lloyd’s strategy, are marine hull and international casualty binders.
Implementation of new leader and follower standards within these specific classes has now begun; the LMA predicts that these will benefit all business classes by improving performance, reducing duplication and ensuring that oversight is proportionate.
The LMA will commence market consultation on the standards within the coming weeks; the pilot is scheduled to start late in quarter one or early quarter two. Further details of the pilot itself will be made available in due course, the LMA stated.
Jon Hancock, performance management director at Lloyd’s, said: “The pilot will enable the market to test the principle of modern risk syndication and develop appropriate leader and follower standards, one of the key foundations of the Future at Lloyd’s.
“Once agreed, the revised lead-follow model will deliver significant benefits, including improved standards, cost reductions, more proportionate governance and oversight and smoother implementation of the Future at Lloyd’s solutions.
“This distinction between leaders and followers should make it easier for brokers to place business at Lloyd’s and should drive good quality, sustainable underwriting performance and growth.”
Testing the water
The modernised syndication pilot strives to shape future standards for both leaders and followers as part of a wider market consultation led by the LMA.
To choose the classes most appropriate for the pilot, Lloyd’s analysed the performance of each class, the materiality of premium, the number and concentration of leaders and followers per class, the number and concentration of brokers for each class and the method of placement split within the class.
The LMA and Lloyd’s jointly agreed on the use of marine hull and international casualty binders as the pilot classes.
Shelia Cameron, chief executive at the LMA, added: “We are pleased to have moved forward to the next stage of the modernised syndication initiative by going through a robust analysis of the most robust classes for the pilot.
“We look forward to continuing to work closely with the market on the creation of the leader and follower standards in the marine hull and international casualty binders classes.”
Stepping forward
On 1 May last year, Lloyd’s published its Future at Lloyd’s prospectus. Six key changes were outlined, explaining how the market can respond to challenges and seize opportunities to change the way it delivers value to customers. These are:
- A platform for complex risk that makes doing business easier and enables efficient digital placement of the most difficult-to-cover risks.
- Lloyd’s Risk Exchange through which less complex risks can be placed in minutes at a fraction of today’s costs.
- Flexible capital that can simply and effectively access a diverse set of insurance risks on the Lloyd’s platform.
- A Syndicate-in-a-Box, which offers a streamlined opportunity for innovators to bring new products and business into the market.
- A next generation claims service that improves customer experience and increases trust in the market by speeding up claim’s payments.
- An ecosystem of services that helps all market participants develop new business and provide outstanding service to their customers.
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