Lloyd’s and the Lloyd’s Market Association (LMA) has announced that Marine Hull and International Casualty Binders will be the pilot classes for the modernized syndication pilot, part of the Future at Lloyd’s strategy.
The pilot will commence in late Q1 / early Q2 and the details of the pilot itself will be made available in due course, Lloyd’s and the LMA said.
Sheila Cameron, LMA chief executive said that “we are pleased to have moved forward to the next stage of the modernized 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 that “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.”
Factors considered by Lloyd’s on choosing the classes 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.
Lloyd’s shared their market wide conclusions with the LMA Board and together they agreed that the most suitable classes for the modernized syndication pilot would be 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.