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Principles for doing business at Lloyd’s

The heart of our Oversight Framework

The Principles for doing business at Lloyd’s (“The Principles”) are at the heart of our Oversight Framework and set out the fundamental responsibilities expected of all managing agents in order to support the markets’ overall performance, capital strength, financial and reputational credibility.

The Principles provide a clear and consistent articulation of the outcomes expected and recognise that different syndicates and managing agents will deliver against the Principles in many different ways.

The Principles are supported by guidance in the form of a Maturity Matrix. Click on each individual principle below to review their respective sub-principles and specific FAQ’s.

Download Principles and Maturity Matrix Download summary of changes for 2025

Materiality and the Maturity Matrix

Across the large number of syndicates and managing agents in the market, we recognise that there will be many different ways to deliver against the Principles and the main differentiator is materiality: the more material a syndicate is to a particular Principle, the more sophisticated we would expect the syndicate’s capabilities to be to meet that Principle. The measures that determine materiality vary by dimension. The materiality metrics and thresholds are available using the button below.

Download the materiality metrics and thresholds

These different levels of sophistication are described as a Maturity Matrix, from FOUNDATIONAL level applying to the least material syndicates through to ADVANCED level applying to the most material.

Principle: A brief statement setting out the fundamental expectation expected of all managing agents and articulated at the highest level. Sub-principles: A number of statements that set out the key areas supporting the Principle. Maturity Matrix & Guidance: Technical level guidance setting out indicators and examples of different ways that the Principles and Sub-Principles could be met across a spectrum ranging from the lowest to the highest materiality. The guidance is expressed in terms of outcomes, capabilities, and processes but is not prescriptive.

The Principles

Underwriting Profitability

Managing agents should produce and execute syndicate business plans which are logical, realistic and achievable and ensure the delivery of a sustainable profit including expense management.​

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Legacy Reinsurance – Underwriting Profitability

Managing agents should ensure their strategy for underwriting legacy reinsurance transactions is clear and that pricing assumptions are sufficiently robust, to ensure the sustainable run-off of acquired liabilities (RITC syndicates only).

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Catastrophe Exposure

Managing agents should ensure syndicates maintain appropriate control of catastrophe risk (from natural and non-natural perils) in line with their wider business strategy.

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Outwards Reinsurance 

Managing agents should define and execute syndicate outwards reinsurance strategy and purchasing plans which effectively support  the wider syndicate business strategy and objectives. 

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Claims Management 

Managing agents should execute a Claims Management Strategy that is aligned to and supported by the business, delivering a high-quality claims service which includes a prompt and fair customer service, complying with legal and regulatory obligations.

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Customer Outcomes

Managing agents should embed a culture and associated behaviours throughout their business to ensure that they consistently focus on good customer outcomes and that products provide fair value. 

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Reserving

Managing agents should ensure syndicates set reserves which are underpinned by a robust reserving process. All Actuarial Function requirements should be met in line with Solvency II.

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Capital

Managing agents should ensure syndicates Solvency Capital Requirement (SCR) appropriately reflects their risk profile and is calculated using a Solvency II compliant internal model.

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Investments

Managing agents should ensure syndicate investment risk is effectively controlled, informed by wider business strategy and adheres to the Prudent Person Principle (PPP) requirements​.​

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Liquidity

Managing agents should ensure syndicates have contractual access to sufficient liquidity in order to withstand a severe liquidity event (defined by Lloyd’s), underpinned by a robust liquidity risk management framework​. ​​​

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Governance, Risk Management and Reporting

Managing agents should have governance structures and internal risk management and control frameworks in place which align to Solvency II requirements, enable sound and prudent management of the business and support delivery of the business strategy​.

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Regulatory and Financial Crime 

Managing agents should have robust frameworks in place to assess and address regulatory and financial crime risks arising from their UK and international  businesses. Frameworks should support compliance with law, regulation and guidance, and allow for well informed, transparent relationships with Lloyd’s and applicable regulators.

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Operational Resilience

Managing agents should maintain robust and resilient operations, embedding cyber resilience and effective third-party risk management​.

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Culture

Managing agents should be diverse and create an inclusive and high-performance culture.

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Further information

Principles Based Oversight: Resource Hub

Resource hub