For claims arising from subscription policies (ie policies insured by multiple Lloyd’s insurers) the number of lead insurers required to review a claim is based on a range of considerations including the specific details of the claim and its financial value.
Around 85% of subscription claims require only one insurer to agree on behalf of all Lloyd’s insurers who have underwritten the policy. Generally these are claims with a financial value to the Lloyd’s insurers of less than £250,000, or currency equivalent (except for the Energy and Property Treaty classes where this value is increased to £500,000). Within the Lloyd’s Claims Scheme (see above) these are termed “Standard” claims.
Larger value claims may require two lead insurers to agree, meaning you get the benefit of their combined experience and expertise (these are termed “Complex” claims under the Lloyd’s Claims Scheme).
Additionally, there are also non-financial considerations that may determine whether two insurers will agree your claim. These considerations tend to vary by class of business (eg a medical malpractice claim will have very different attributes to a cargo damage claim), but other factors may include whether a claim involves serious injury to the insured or claimant, or where there are issues around establishing the exact value of the claim.
The number of lead insurers required to agree a claim is continuously re-assessed upon each update. It is therefore relatively common that as a claim progresses and further facts and information are established (eg following investigation by an expert loss adjuster), that the number of lead insurers reduces from two to one, thereby speeding up the settlement process. Similarly, just because a claim is financially large does not necessarily mean that it is complicated to handle. In these instances it is possible for the two lead insurers to jointly decide to reduce the number of agreement parties to just one.
Further information can be found in the ‘Lloyd’s Claims Scheme Process Guidelines’ available at lloyds.com/claimsscheme