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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

Catastrophe Exposure Maturity Matrix

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

Access Principles and Maturity Matrix document

FAQs

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)
Airline
Aviation Products/ Airport Liabilities
Aviation XL
Casualty Treaty (non-US)
Casualty Treaty (US)
Contingency
Cyber
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)
Nuclear
Power Generation
Professional Indemnity (non-US)
Professional Indemnity (US)
Terrorism
Energy Offshore Liability
Energy Onshore Liability
Personal Accident XL
Political Risks, Credit & Financial Guarantee
Space