What is a Syndicate in a box?
A Syndicate in a box (SIAB) is a market facing syndicate that differs from a traditional syndicate in the following ways:
- A SIAB can write less than £100m GWP in year one.
- A SIAB can only write incidental exposure to Lloyd’s most significant catastrophe perils (US Wind, North American Earthquake, Japanese Wind, Japanese Earthquake and European Storm).
- A SIAB should predominately write short-tail business.
- A SIAB should have a projected net operating expense ratio (operating and acquisition cost) of less than 35% in its third year.
SIABs offer sponsors with innovative and entrepreneurial business cases an opportunity to join the Lloyd’s market. During the third calendar year, Lloyd’s will review the performance of the SIAB against Key Performance Indicators (KPIs) agreed at the outset between Lloyd’s, the proposed managing agent and the backer of the syndicate. Meeting the KPIs is a key consideration when deciding whether the business can progress to full syndicate status.
Why establish an SIAB?
The SIAB model was developed to allow smaller, entrepreneurial business proposals the opportunity to establish an underwriting platform in Lloyd’s at a smaller scale and lower cost base.
The SIAB model also provides:
- A faster approval timeline and reduced Lloyd’s application fee.
- A reduced initial capital load proportionate to the risks written.
- The option to defer enhanced Central Fund contributions until years four to six.
- Proportionate oversight to reduce the administrative burden. A SIAB is exempt from a number of Lloyd’s financial reporting requirements.
- Business plans for years two and three will be automatically approved subject to there being no material change to the initial three year plan.
Lloyd’s assessment criteria
Lloyd’s has established overarching criteria for the assessment of new entrants; these criteria are provided for by the Underwriting Byelaw and set out in full in the requirements made pursuant to the Underwriting Byelaw.
Lloyd’s will consider the extent to which the applicant’s proposed business adds value to the Lloyd’s market, having regard to criteria including:
- The nature and robustness of the business plan;
- Whether the applicant is a competent, proficient and capable organisation;
- Whether the applicant is of appropriate reputation and standing;
- Whether the applicant has adequate capital and financial resources;
- Whether the applicant is able to meet the Lloyd’s principles framework,
- where applicable;
- The applicant’s support for ‘Future at Lloyd’s’ and other market-wide initiatives.
In terms of the value to Lloyd’s, we are looking for a SIAB to:
- Deliver differentiation and/or innovation in terms of product or distribution.
- Operate through the application of existing and tested technology.
- Be a credible disruptor to traditional insurance practices.
Fees and charges
- Application fee is £100,000 (VAT is not applicable).
- The application fee invoice will be issued once the application has been recommended to the Council by the Business Opportunities Committee.
- Please note the application fee is non-refundable.
- Further information on charges payable by members to operate in the Lloyd’s market can be found in the Triage Quantitative submission.
- We review our charges annually and every September we release a Market Bulletin confirming the charges for the following year.
Download the Syndicate in a box Guide to find out more about our assessment criteria and how to apply.
You can find all the materials required for your application, including templates, by visiting the Useful resources page.