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Principle 7: Capital

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

To support this, managing agents should ensure their syndicates:

Maintain an internal model which captures all material risks that the syndicate is exposed to​

​Use modelling assumptions which are realistic and justifiable, methodology which is adequate and all material limitations are understood

Have strong feedback loops joining the business and the model​

Demonstrate robust governance and understanding of the model. This includes adequate understanding and challenge at senior management level.

Implement changes to the model which are reasonable and justified and their impact on the SCR adequately explained​​

Conduct objective challenge of the internal model through independent validation

Capital Maturity Matrix

The Maturity Matrix for Capital is available within the Principles and Maturity Matrix document, which can be found on our Principles for doing business at Lloyd’s page.


No it doesn’t. Most syndicates will receive some feedback from us. We will monitor the number of feedback points we send to syndicates and flag those that consistently have a large number, but getting a few feedback points doesn’t (on its own) mean a syndicate is below expectation.

The syndicates that will be subject to a deep dive in a given year are agreed in the prior November and then syndicates will be informed via their Oversight Letter. Syndicates are prioritised for deep dive based on size, known issues and volume of oversight the syndicate has had in recent years.

No! Loadings are the primary quantitative indicator, however there are a large number of qualitative indicators and the deep dives we do will be a key factor in assessing syndicates performance against expectations. We will continue to clarify to syndicates exactly what they need to do to address any loadings, meaning syndicates should be able to address these in a timely manner to improve their assessed performance against expectations.