26 June 2017Insurance

Lloyd’s CEO Beale reveals new oversight strategy, market to shrink in 2017/2018

Lloyd’s CEO Inga Beale has detailed a new oversight approach in her June 26 half-yearly market briefing and plans for a 10 percent headcount reduction.

A new risk-based approach to syndicate oversight being implemented by director of performance management Jon Hancock will result in fewer minimum standards reviews, while focusing on high-impact areas, and having fewer portfolio review classes, but ones with greater premium coverage and that have performed worse recently, Beale explained.

“We will spend more time helping underperforming syndicates improve underwriting performance while leaving the good performers to get on with running their successful businesses,” Beale said.

To protect the Central Fund in the current challenging environment, Lloyd’s syndicate oversight activity is focusing on all elements of combined ratio, rather than almost exclusively on loss ratios, she explained.

Given current conditions, improved performance means the market should shrink in 2017 and 2018 as underwriters maintain strong discipline, Beale noted.

Managing agents and brokers need to look at ways to reduce internal costs and work more efficiently; adopting London Market Target Operating Model (TOM) initiatives will help reduce market-wide costs over time, Beale said.

Regarding acquisition costs, the oversight team has been collecting data from managing agents, and once they have completed the analysis will be working on possible next steps as to how each of you can reduce costs over the entire value chain.

“We expect to see the new oversight focus I have outlined above reflected in managing agents’ 2018 plans,” Beale said.

At the same time, Lloyd’s plans to reduce the headcount by around 10 percent. “We are seeking to minimise the impact on our people by opening up a voluntary severance programme and through re-deployment within the organisation,” Beale noted.

Save 20% on selected tickets at  Intelligent InsurTECH Europe 2017 with the discount code "Save20"

Today’s stories

Cat losses cause US P&C sector profit drop 42.2% YOY in Q1

AXIS Insurance appoints Nance to lead US E&S property business

D’Onofrio replaces Sillat as CEO of Ryan Specialty MGA

Insurtech adoption jumps: EY

German mobile bank expands into insurance

Insurance industry warned the UK government on fire risk before Grenfell disaster

Global reinsurers ask EU for mutual market access with Britain post-Brexit: Report

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
31 March 2017   An unspectacular increase in large claims led Lloyd’s of London to report underwriting losses in all classes in the accident year 2016, driving the management to take action to improve underwriting quality and expenses.
Insurance
13 June 2017   The London Market, along with its flagship Lloyd’s, is falling behind in the important high-growth Asian insurance market as well as in major emerging markets such as Latin America.