Lloyd’s of London has been a global leader in the insurance industry dating all the way back to the 17th century. Beginning in coffee house in 1688, Lloyd’s has been recognized as a trusted carrier for specialized insurance ever since and the insurance giant has spent the last 330-plus years providing insurance coverage to address both common and unusual risks all around the world. However, in more recent years, Lloyd’s has experienced some challenges, including disruptive events and catastrophic losses that have essentially forced them to review all of their business segments and make changes to their marketplace.
While Lloyd’s of London’s long history gives the company a certain level of prestige over other insurers, competition from insurance around the globe is mounting; due, in part, to rapid improvements in technology and new capacity entering the market. These trends have motivated Lloyd’s to push ever harder to improve performance. In particular, Lloyd’s has been reviewing all aspects of the business in order to identify and prioritize areas in which profitability can be further improved. Cost is a big concern, and industry sources say that Lloyd’s has been looking into ways to cut members’ costs, which began to rise due to increasing regulatory and compliance paperwork as well as higher commission requirements from brokers.
According to Lloyd’s, actions are being taken in the marketplace to ensure it remains a profitable and global hub for insurance and reinsurance. One of the recent actions Lloyd’s has taken was to review Syndicates and broker books of business with an aim toward reducing capacity for unprofitable coverholders. Efficiency has become a key area of focus for Lloyd’s and many other global reinsurers, with companies and markets of all sizes looking to reduce costs in order to help offset failing returns. Lloyd’s recently began mandating the use of the London Market Group (LMG) Placing Platform Limited (PPL) – an electronic placement system – in an attempt to reduce unprofitable underwriting, improve pricing and enhance client services. The new system is currently processing 30 percent of all business, with plans to increase to 80 percent quickly.
The impact of these efforts has already begun to show; MGAs with contracts renewing 1/1 have already seen reduction in capacity and increases in pricing. Wilmington Insurance, an authorized syndicate of Lloyd’s of London, has been watching these changes in the Lloyd’s marketplace to ensure they are able to offer their clients favorable pricing throughout the transition.
About Wilmington Insurance Agency
Wilmington Insurance Agency delivers comprehensive coastal property solutions. We are a Managing General Agency and provide independent insurance agents with property and liability insurance solutions for residents and businesses primarily in Maryland and Virginia. We work alongside our sister company, Wilmington Insurance Company, established in 1996 and providing Property & Casualty commercial lines business, homeowners, and condominium insurance in the state of Delaware. To learn more about how we can help you to expand your book of business in the coastal market, contact us at (302) 231-2800.