Managing agents to increase capacity at Lloyd’s

87% of managing agents want to increase their stamp capacity at Lloyd’s, according to research completed by Aon’s UK capital advisory team and the Lloyd’s Market Association. The report, entitled, “How CFOs Connect Capital and Business Strategy,” was completed by CFOs at 28 Lloyd’s managing agents, representing 75% of the market’s capacity for 2021.

Eric Paire, head of the UK capital advisory team at Aon, said: “Following a couple of difficult underwriting years, the start of the COVID-19 pandemic and the tightening of rules on the use of Tier 2 capital, it appeared timely to look at how syndicates’ approach to capital management has evolved.

“In this regard, our report offers insight into the key considerations of Lloyd’s CFOs, and highlights their evolving role, which includes setting strategy, facilitating growth, managing risk and optimising capital.”

The research found that intragroup reinsurance was managing agents’ primary capital optimisation technique, utilised by 78% of participants. A third of survey respondents said they intended to implement legacy solutions in the near future.

Paul Davenport, finance and risk director at the LMA, said: “This report aims to provide LMA members with a comprehensive overview of how capital and business strategy are connected within the Lloyd’s market. We would like to warmly thank all those CFOs who took the time to answer our questions and comment on their capital strategy.”

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