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Principle 9: 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.

To support this, managing agents should ensure their syndicates:

Identify and assess their key sources of liquidity risk​ and have appropriate monitoring and reporting in place

Conduct and consider the outcomes of stress tests, including Lloyd’s defined stress test and syndicates’ own 1:200 stress test​​​

Have clearly defined liquidity risk appetites

Conduct regular assessment of liquidity buffers above expected cashflow projections

Have thorough liquidity contingency plans in place including articulation of what management actions and steps are open to alleviate liquidity strain

Have robust governance over liquidity risk

Liquidity Maturity Matrix

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


The template originally went out in December and a slightly revised version was issued in March – reach out if you haven’t seen it.

We treat FIS the same way as FAL.

We get the results in by syndicate we can allocate the syndicate and their results to the members and apply the FAL and FIS to calculate any net residual central fund strain.

Yes if they are in trust funds, they would not be considered free assets

The M&URs included some requirements around investment allocation and that was driven by liquidity as well as other things

If Syndicates could exclude FIS when we allocate the syndicate level results to members we can bring in all of the FIS and FAL at that point

The stress test is intended to be this strong. Please feel free to share views with Lloyd’s.


If the Lloyd’s defined stress test is appropriate to liquidity then use it, but we appreciate that some syndicates may not be able to use this, in which case they should use something more appropriate to them