Lloyd’s of London has published a guidance paper outlining new plans designed to help managing agents, syndicates, and their policyholders following a market-turning event (MTE).
The report sets out six guiding principles categorised into crisis management and opportunities to support the market. The goal is to ensure the market responds to a crisis effectively and remains solvent while paying claims as quickly as possible.
Explaining how Lloyd’s would respond to an MTE, the insurance market set out the following principles:
- Market stability and payment of claims - ensuring the market is solvent and liquid to enable prompt claims payment.
- Management of failing syndicates/members - the run off of failing syndicates should be managed in an orderly fashion to minimise any wider impact.
- Stakeholder/data collection/coordination and communication - coordinating interaction and collation of data with key external stakeholders while minimising duplication.
- Support the market - involves responding to opportunities arising from an MTE, prioritising activities in support of existing businesses.
- Accelerate key processes - a commercial and pragmatic approach, including speeding up the process of approving syndicate business plans.
- Lloyd’s priorities - the focus is on supporting the market in response to an MTE, possibly suspending non-essential central activities.
Jon Hancock, director of performance management at Lloyd’s, said they want to make it easier for syndicates to do business by focusing the market’s oversight efforts on the important things.
“One important area where we can help is to make sure the Lloyd’s market is in a position to act swiftly and decisively to any future market-turning events. This is about stronger, smarter oversight,” noted Hancock.
He said: “We want to make it as straightforward as possible to raise new capital. Doing so will ensure that Lloyd’s is even better prepared for once-in-a-generation market-turning events.” That means not imposing overly burdensome requirements on syndicates or insisting on unnecessary processes.
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