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New Service Company Applications

When a Managing Agent wishes to establish a new service company - or a branch of an existing service company.

A service company is an approved Coverholder that has satisfied Lloyd's that it is associated with a Managing Agent because:

  • It is a wholly owned subsidiary of that Managing Agent or
  • It is a wholly owned subsidiary of the Managing Agent's holding company or
  • It meets such other criteria or requirements as Lloyd's may from time to time prescribe:
  • Is authorised to enter into a contract or contracts of insurance only to be underwritten by members of a syndicate managed by the service company Coverholder's associated Managing Agent in accordance with the terms of a service company underwriting agreement or by its associated insurance company.

Establish a business plan

Initially a Managing Agent looking to establish a Service Company must make their SUP (Syndicate Underwriting Performance) Executive, and concurrently, the Lloyd’s Representative if one is present in the applicable territory, aware of their intention. Discussions will be held in respect of the classes of business to be underwritten, the experience of underwriters and the entity’s business strategy, amongst other things.

Following discussions with the Managing Agent and general agreement by Lloyd’s over the proposal i.e. that it is realistic and achievable, the next step is for the Managing Agent to submit a business plan (SBF) via the core market return system specifically for this prospective establishment with the corresponding supporting narrative attached. No underwriting or operational set up can occur without the Capital and Planning Group’s (CPG) approval of the business plan, nor without the approval by Delegated Authority. If a Service Company intends to operate with ‘flexible use’ (i.e. an underwriter has the ability to underwrite on behalf of both the syndicate and company paper), the Managing Agent must also submit a completed flexible use form to London for approval, prior to any underwriting taking place. Lloyd’s London will check the information matches the SBF and will monitor this annually.

Managing Agents are reminded that all Lloyd’s Service Companies globally must adhere to the Best Practice within the thematic review. Underwriting Performance will check that the line sizes requested are aligned with their SBF. If it is larger than that approved for London we will need an explanation as to why this is so. We will need income estimates and loss ratio estimates both on a gross basis. The loss ratio estimates for each class should not be less than that approved for London - if they are we will need an explanation as to why. These discussions will have taken place through the initial business planning process.

Seek legal advice

  • Process of establishment
  • Options for type of venture
  • Local regulations, e.g.: business allowed; capital requirements; local tax advice; employment law

Branch vs. company

  • e.g.. in Europe the IMD enables a branch to be set up via “passporting” rather than incorporating a new company
  • Full service operation vs. contact office cost comparison
  • Underwriting credibility; how business is normally conducted there
  • Local regulations re where business is deemed to have been bound
  • Claims service and related regulations (e.g. response times / licensed individuals)
  • Location of back office functions (accounting, reporting, HR, policy production), i.e. in the service company, managing agency in London, or outsourced.

Dual platform

a) Will this apply? If so, consider: transparency/clarity of operation; and extent of Lloyd’s knowledge & experience of local staff.


  • Identify which operating model is to apply and familiarise with related brand guidelines
  • Governance & Franchise Standards
  • Reporting lines; committees / board structure
  • Planning; monitoring to plan / board reports
  • Procedures, and monitoring compliance (e.g. exception reports, internal audit)
  • Demonstrating to Lloyd's how minimum standards will be met
  • Bedding-in period; cultural issues

IT systems

  • Enabling prompt data capture (for internal/external reporting and monitoring)
  • Enabling remote oversight


  • Ex pat vs. local (higher cost of ex pat; alignment of local staff to corporate culture)
  • Training and induction (IT; procedures)


  • Critical to get good local advice (corporate tax; payroll tax; VAT; GST)
  • Contact Lloyd's tax department
  • Risk of setting wrong precedent for other managing agents in the future


  • Most DU business is processed via XIS (to enable regulatory reporting)
  • Can opt for non-cash processing (i.e. just the data, to enable regulatory reporting)
  • Business processed outside of XIS has to be declared to Lloyds (for reg reporting)
  • Managing agent need a CSN if no broker (1 day training/assessment on abilities)

Application process

The Managing Agent must meet with Delegated Authority (DA) team to discuss the proposed Service Company application. They will also need to review the Lloyd’s referral criteria document and assess if this proposed application will require any further touch points within Lloyd’s.

Some applications will require additional conversations or be reviewed by internal Lloyd’s teams. These could be based on regulatory, underwriting, customer outcomes or delegated authority referrals.

The sponsoring managing agent will need to identity these additional referrals and contact the Delegated Authorities team, will be able to assist with facilitating any extra referrals required. The Country Manager will also be involved in these discussions. This should be completed before the managing agent completes their due diligence of the applicant and before the application is submitted to Lloyd’s.

On preliminary approval by DA to proceed, the application will be completed on ATLAS. This is required to be started by Lloyd’s DAT who will conduct this process after the closure of the introductory meeting. This is subject to a legal name being established and the main point of contact being identified for the Service Company. Prospective Service Companies must comply with Lloyd’s requirements outlined with the thematic review. The undertaking must be provided by the Service Company under the terms of paragraph 15 (b) of the Intermediaries Byelaw. Words and terms in bold type in this document have the meanings given in the Definitions Byelaw (which includes the definition of a “Service Company coverholder”) Every application requires a Service Company Coverholder Undertaking to be reviewed, signed, and uploaded onto the ATLAS application form.

Once any referrals have been reviewed and approved, the Atlas application can be formally submitted to Lloyd’s for processing.

Managing agent who meets the required expectations under the Principles for Doing Business

A managing agent who meets the required expectations under the Principles for Doing Business, will be able to provide a signed attestation to Lloyd’s confirming the proposed coverholder meets all the necessary requirements to become a Lloyd’s service company coverholder.

Lloyd’s will then process the application alongside the attestation.

Sponsoring managing agent not meeting their expected maturity ratings

If the sponsoring managing agent does not meet the required maturity level under the Principles for Doing Business; they are required to submit a fully completed service company decision paper, with the Atlas application and Lloyd’s will carry out an assessment of this service company coverholder. The decision paper should be completed by the sponsoring Managing Agent. 

Please contact the Lloyd’s Delegated Authorities Team for a copy of the decision paper.

Service Company Underwriting Agreement

Once the Service Company application has been processed by Lloyd’s and any other Lloyd’s team, they will be able to enter into a Service Company Underwriting Agreement.

A Service Company Underwriting Agreement is a binding authority which authorises a service company to enter into a contract or contracts of insurance only to be underwritten by members of a syndicate managed by the service company Coverholder's associated Managing Agent (and, where applicable, by its associated insurance company). The Lloyd's Market Association has developed a model Service Company Underwriting Agreement which can be used.

This is one of a series of model wordings which may be used to ensure compliance with the Intermediaries Byelaw and the Requirements to this Byelaw.

The LMA has issued an updated version of the Service Company Underwriting Agreement ("SCUA"), LMA3134 dated 7 September 2015, with the aim of providing a comprehensive model binding authority contract for a Service Company Coverholder being 100% aligned to its associated Managing Agent and which binds insurance only for its managed syndicates.

Service Company Code of Practice

A separate Code of Practice has been prepared by Lloyd's regarding Service Companies. This document provides all necessary information governing Lloyd's expectations for the approval, on-going management and reporting of service companies.

Service Company Undertaking

Lloyd's requires all service company to sign an undertaking, which reflects their relationship with Lloyd's. The undertaking sets out, in clear terms, what Lloyd's expects of service companies when they deal with their customers, clients, Lloyd's brokers, managing agents and Lloyd's. The undertaking is designed to formalise the high standards demonstrated by and expected of all service companies at Lloyd's. The service company undertaking forms part of Lloyd's delegated underwriting requirements.

By signing the undertaking, the applicant agrees to act in line with the terms of its service company agreement and any local requirements of the territory in which it is based or in which it will trade, provide services or do business.

The applicant also agrees to certain conditions that would apply if Lloyd’s withdrew its approval or otherwise stopped it from accepting business under a binding authority. The undertaking needs to be wet signed (electronic signatures are not accepted) and uploaded to ATLAS.

Attaching the Signed Undertaking

To attach a signed copy of the undertaking select Add a Document. When choosing a title aim for something self-explanatory such as 'Service Company Undertaking' or 'Undertaking Signed 31/12/20XX'.

The undertaking should be un-restricted to all companies involved in this change.

Lloyd's has created several guidance documents for Service Companies looking to establish in Asia (Singapore), Australia, Dubai and Hong Kong. Please see useful documents below for these guides.