The exodus of personal lines insurers from Lloyd's is a barometer of market forces

Two weeks ago, Highway completed its rather long-winded withdrawal from the Lloyd’s market.

Though it began some six years ago, the timing of the final push is telling in that it highlights the steady flow of late of personal lines business away from Lime Street.

It is, however, less of a sorry decline than a reflection of the changing face of the market.

At the turn of the decade, Lloyd's was a very different place to do business – particularly of the personal lines variety. In its heyday, in fact, there were over 40 motor syndicates stationed there.

Now, less than ten remain.

Despite the valiant efforts of the Lloyd’s Market Association to create more favourable conditions for personal lines insurers, charges remain almost 10% cheaper on the esrtwhile innocuous Island that straddles the Westernmost mouth of the Mediterranean.

Consequently the largest motor insurer at Lloyd’s, Equity Red Star, has announced it is driving £50m of its private motor business to Advantage, its underwriting arm based in Gibraltar. Link and Zenith have also moved most of their business (not to mention their European base) from Lloyd's to the rock.

Commentators in the market have said that the latest exits could trigger a period of instability which could reduce Lloyd's share of the personal lines market to less than 5%, compared to 15% not so long ago.

Yet Lloyd’s remains staunchly committed to the business. Though its history would have us believe it, with rates still showing only fleeting signs of recovery, it will be interesting to see if it is a commitment that is honoured.