Lloyd's Modernised Syndication Pilot business classes confirmed
The Board of the Lloyd’s Market Association (LMA) has announced, in conjunction with Lloyd’s, that the pilot classes for the modernised syndication pilot as part of the Future at Lloyd’s strategy will be Marine Hull and International Casualty Binders.
All classes of business are expected to benefit from leader and follower standards, which will improve performance and reduce duplication, as well as ensure oversight is proportionate. The modernised syndication pilot will help to shape future standards for leaders and followers as part of a wider market consultation led by the LMA. We conducted extensive analysis was conducted on a wide range of possible classes that could form part of the pilot.
Factors considered included:
- The performance of the class
- The materiality of premium in the class
- The number and concentration of leaders and followers in the class
- The number and concentration of brokers in the class
- The method of placement split within the class
On the basis of this analysis, we shared our market wide conclusions with the LMA Board. The LMA Board and Lloyd’s jointly agreed that the most suitable classes for the modernised syndication pilot are therefore Marine Hull and International Casualty Binders.
Work is now under way on the leader and follower standards within these classes, and market consultation on these standards will commence in the coming weeks, led by the LMA. The pilot will commence in late Q1 / early Q2 and the details of the pilot itself will be made available in due course.
Sheila Cameron, Chief Executive of the Lloyd’s Market Association, said: “We are pleased to have moved forward to the next stage of the modernised syndication initiative by going through a robust analysis of the most appropriate classes for the pilot. We look forward to continuing to work closely with the market on the creation of the leader and follower standards in the Marine Hull and International Casualty Binders classes.”
Jon Hancock, Lloyd’s Performance Management Director, said: “The pilot will enable the market to test the principle of modern risk syndication and develop appropriate leader and follower standards, one of the key foundations of the Future at Lloyd’s. Once agreed, the revised lead-follow model will deliver significant benefits including improved standards, cost reductions, more proportionate governance and oversight, and smoother implementation of the Future at Lloyd’s solutions. This distinction between leaders and followers should make it easier for brokers to place business at Lloyd’s, and should drive good quality, sustainable underwriting performance and growth.”