Lloyd’s nears pan-US surplus lines eligibility
Lloyd’s will have surplus lines eligibility in all 50 US states when legislation passed in Kentucky comes into effect in July.
The move paves the way for Kentucky policyholders to access the Lloyd’s market for surplus lines products. It also means Lloyd’s underwriters will be able to place multi-state surplus lines risks in every US state going forward.
In a briefing, the market said that partly driven by an absence of large losses and low investment income, a notable trend in 2014 has been for markets to seek premium growth. This increasing pressure for syndicates to write and retain more of their premium income has begun to impact the treaty reinsurance market. Increasingly re/insurers are holding strategic dialogue meetings with brokers to determine how they can write more business, the report noted.
Patrick Talley, US central regional director from Lloyd's America, said: “As a specialist market, Lloyd’s is a natural fit for surplus lines. It allows for maximum flexibility and fosters the development of innovative and specialised risk management solutions. The passage of the new law will enable Lloyd’s to offer its specialised products in all 50 states.”
The biggest benefit of the new law will be that it will simplify the placement of multi-state risks, which represent a significant portion of Lloyd’s US business.
Talley added that he believes the change will also increase interest in obtaining Lloyd’s coverage on both a surplus lines and admitted basis in Kentucky.
“Indeed, some Lloyd’s underwriters may have been hesitant to write Kentucky admitted business, since the requirements differ from the other states where they write, mostly on a surplus lines basis,” he said.
