This Principle applies to RITC (Reinsurance to Close) syndicates only.
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.
To support this, managing agents should ensure their syndicates:
Have a clear and robust medium to long term business strategy with clearly defined and understood underwriting risk appetite, giving consideration to existing legacy reinsurance transactions on the balance sheet
Develop and execute legacy business plans which align with their business strategy
Not applicable
Manage and control expenses in order to ensure they are appropriate for the business written
Not applicable
Have an effective pricing framework in place in order to set sustainable pricing for legacy transactions that will ensure the discharge of assumed liabilities within the assets received with, and generated by, the assumed portfolio
Have robust governance processes in place to support legacy underwriting decision making, with underwriting assumptions clearly articulated and understood by stakeholders supported by proactive involvement and sufficient challenge by the wider functions
Not applicable
The Maturity Matrix for Underwriting Profitability 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