Strategic priorities 2017-2019
There are eight strategic priorities which are either key to the delivery of Vision 2025, or are critical to the ongoing successful performance of the market.
The nature of Lloyd’s, as a market of independent businesses backed by the Central Fund, requires the Corporation to play an active supervisory role. This role covers performance management, capital setting and risk management. In addition to these supervisory activities, it is important that Lloyd’s market oversight is supportive of sustainable profitable growth and innovation, and is valued by all stakeholders.
The Corporation needs to ensure that supervision of the market is eﬀective and in this regard we are accountable to both the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). It is, however, a key objective for us to minimise duplication with work undertaken by the PRA and the FCA.
The market oversight framework is built upon the minimum standards against which managing agents are monitored. Although Lloyd’s does not operate a zero failure regime, and syndicates may fail, the Corporation seeks to minimise the risk of impact on the Central Fund and will look first to protect policyholders’ interests.
Through Lloyd’s market access rights, managing agents can underwrite risks or reinsure business from more than 200 territories. This global network of trading rights is one of Lloyd’s most important assets. A key strand of Vision 2025 is the protection and expansion of this access.
Emerging markets are projected to continue to grow and Lloyd’s is under-represented in these markets. Lloyd’s strategy is to pursue new trading rights in developing markets when the timing is appropriate, supported with eﬀective operational infrastructure. This will not be at the expense of Lloyd’s position in established markets which make up the majority of Lloyd’s business and remain a major focus of our work.
In order to obtain access in some markets, commercial or regulatory requirements may require a local presence. The prioritisation of new trading rights and the form of access is agreed by the market and Corporation working in partnership.
Achieving true global access to markets will also entail maintaining and strengthening our distribution channels. This involves building excellent relations with our distribution partners and ensuring that Lloyd’s is the place where they want to do business.
Technological change and automation is disrupting the insurance industry, demanding that we adapt and transform the way we do business. At Lloyd’s, placing and processing business needs to be easier and more efficient. This will make the market more attractive to existing and new business in London and in local markets – and increase Lloyd’s competitive advantage. To achieve this, we must work collaboratively with managing agents, the broker community and the company market carriers to build an industry leading infrastructure and service proposition covering London, Lloyd’s international operations and delegated authority business.
We have a multi-year programme of work covering both Lloyd’s specific developments and London market-wide elements (such as London market data standards, and processes – including electronic placement).
Our primary aims are to make the London Market as a whole a more attractive and efficient place to conduct (re)insurance through one touch data and common use of central services for non-competitive activities. While it can be challenging to get so many diﬀerent businesses to work together, our interests are aligned – we all want a successful market within which participants can compete for business.
Lloyd’s capital framework oﬀers three key advantages:
Lloyd’s strategy is to maintain these advantages and ensure that Lloyd’s continues to be attractive to all types of capital provider. We want to ensure that Lloyd’s capital advantages remain relevant to the current and prospective capital base.
The Lloyd’s market prides itself on its long history for developing and underwriting new products, and has a reputation for meeting the various, and sometimes unique, needs of its many customers.
Our priority is to ensure that the Lloyd’s market continues to capitalise on its expertise in innovation. The Corporation seeks to draw attention to, encourage and recognise innovation in the market. It helps to facilitate this through thought leadership, identifying product gaps and supporting market participants in the pre-competitive stage of product development.
Innovation is not just about new insurance products, but also covers how we operate and do business, and how we publish thought leadership materials and foster a greater understanding of global risks, recognise opportunities to improve efficiencies, add value and capitalise on the assets we have. Lloyd’s will continue to look for opportunities to leverage process innovation to make it a positive diﬀerentiator.
Big and complicated risks are drawn to Lloyd’s, attracting the world’s best insurance talent, which in turn attracts some of the world’s biggest and most complicated risks. It is a virtuous circle which Lloyd’s would like to perpetuate. This arises in part through the clustering benefits of the London insurance market. The whole market has an interest in ensuring that relevant skills, capabilities and knowledge are acquired and developed in order to reinforce this diﬀerentiator.
We want to draw on all talent, from varied backgrounds, to ensure we get the best. Diversity and inclusion is good for business and remains a priority. The Corporation and market work in partnership, through Inclusion@Lloyd’s, to embrace and embed diversity by widening perspectives and sharing best practice.
Lloyd’s brand is globally recognised and highly valued both within the insurance industry and broader society. The positive role Lloyd’s plays in times of crisis is well documented and the strength of the marketplace is held in high regard. A strong global brand and positive reputation make Lloyd’s more attractive to clients, capital and talent. Confidence in the brand encourages policyholders and brokers to choose Lloyd’s, creates a market where commercial businesses can thrive and oﬀers security for society through wider use of insurance for risk transfer.
Nonetheless, as globalisation gathers pace and competition intensifies, there is no time for complacency. Work continues to protect and promote the Lloyd’s brand to ensure its future power and relevance has commenced with the full support of the market.
Lloyd’s is committed to eﬀecting positive change by being seen as a leader in its responsible business approach. This is reﬂected in Lloyd’s business practices as well as its work with community and charity partners.
The Lloyd’s market aims to ensure its customers are fairly treated at all times and should aspire to the highest standards in business conduct generally.
Lloyd’s will use its experience and expertise to help communities around the world build resilience against disasters, including the eﬀects of climate change and extreme weather events. All of these activities help to complement the Lloyd’s brand and attract new and diverse talent.