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Principle 2: Catastrophe Exposure

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

To support this, managing agents should ensure their syndicates:

Manage catastrophe exposure in line with their agreed risk appetites

Employ data standards, risk quantification tools, controls, expertise, and reporting frameworks which are appropriate to their risk profile

Adequately justify and validate methodology and assumptions, including expert judgements

Have a complete representation of catastrophe risk in the internal model, reflecting all possible sources of loss and allowing effective use by wider business functions

Have robust governance and oversight of risk aggregations

Below are some of the frequently asked questions about this Principle, including the questions that were asked in the Technical Briefing session(s).

If you have any further questions, please reach out to

These have now been agreed they can be found on our website within the Board briefing slides (slide 23) on the Project Rio: Resource Hub. 

There is only one expected maturity rating covering all non-nat cat lines of business (see detailed list below). When performing our reviews against the Principles for non-nat cat, we will consider exposure management approaches relative to the materiality of the underlying lines of business in a proportionately appropriate way. If a syndicate writes a lot of cyber business relative to other lines for example, we would expect their exposure management approach to be relative to the risk posed to the syndicate. However, an overall maturity rating will be applied across lines of business at sub-principle level and then aggregated to principle level for non-nat cat as a whole. 

The non-nat cat lines of business can be found below:
Accident & Health (direct)
Aviation Products/ Airport Liabilities
Aviation XL
Casualty Treaty (non-US)
Casualty Treaty (US)
Directors & Officers (non-US)
Directors & Officers (US)
Employers Liability/ WCA (non-US)
Employers Liability/ WCA (US)
Energy Construction
Energy Offshore Property
Energy Onshore Property
Financial Institutions (non-US)
Financial Institutions (US)
General Aviation
Marine Hull
Marine Liability
Marine XL
Medical Malpractice
NM General Liability (non-US direct)
NM General Liability (US direct)
Power Generation
Professional Indemnity (non-US)
Professional Indemnity (US)
Energy Offshore Liability
Energy Onshore Liability
Personal Accident XL
Political Risks, Credit & Financial Guarantee

Given that Lloyd’s have been focusing syndicate’s attention on improving exposure management within non-nat cat classes for a number of years, we would expect syndicates should already be on that journey to meeting expectations under the Lloyd’s Principles for Doing Business. If a syndicate is going to start writing a new non-nat cat class in 2023 then they will need to submit clear intent to have appropriate processes in place. There will be plenty of opportunity to have discussions around this with the Lloyd’s Exposure Management Team during the review period in Q2 2022.

Yes, on the whole a syndicate’s prior CROF score will map across to the new nat-cat maturity score under the Principles for Doing Business. The only exception would be where there has been rounding to aggregating the 20 CROF components up to the RIO sub-principle level. Please contact your Exposure Management Manager if you would like to confirm your nat-cat maturity score under the RIO Principles for Doing Business.