After the Q3 massive loss events, Lloyd's has needed a GBP 3 billion capital inflow to restore its resources

20 December 2017 — Daniela GHETU
Approx. GBP 3 billion of additional capital has been provided to restore Lloyd's of London's market capital resources to the level prior to the Q3 2017 loss events and to cover changes in capital requirements for 2018 underwriting, Lloyd's leaders said.

In their annual email to the market reflecting on 2017, Lloyd's Chairman, Bruce Carnegie-Brown and Chief Executive, Inga Beale have pointed out that "no syndicate has ceased trading due to the storms and there is zero impact on the Central Fund."

In their opinion, "the market's response to these catastrophes has been phenomenal - working together to pay claims and get businesses and communities back on their feet as quickly as possible. So far you have paid out almost USD 2 billion in claims for Harvey, Irma and Maria."

Year 2017 is seen at Lloyd's as being "a year of two halves. The first half saw the challenging conditions in 2016 continue to squeeze the market. The picture changed during Q3 and Q4 with a series of natural catastrophes affecting the US and Caribbean, Mexico and South Asia."

As for the bear future, Carnegie-Brown and Beale are anticipating "some firming of prices into 2018." But to successfully cope with the challenges the market is facing, underwriting discipline, modernisation and improved efficiency need to continue throughout 2018. Also, "next year is primarily about adopting the new technology - moving from the creation of solutions that are modernising the market to adoption by market participants."

In short, Lloyd's direction throughout 2018 will follow a renewed strategic plan aiming to address some key challenges as: making it easier and more attractive for business to come to Lloyd's; reducing the expense ratio and costs; streamlining market oversight; and embracing innovation, technological developments and the use of data to improve the efficiency of the market.

The main focus next year being three areas:
  • Market oversight: enabling market participants to thrive and achieve superior operating returns through a risk-based performance framework
  • Operations and services: embracing developments in technology, continuing the digitisation of the market and encouraging the broad-scale adoption of new systems developed as part of the TOMCustomers and distribution: testing new and innovative ways to use technology to improve access to Lloyd's and to make it more competitive as a global market

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