As the world’s oldest and leading specialty insurance market Lloyd’s has long had an unrivalled reputation for innovation.
Its ‘Future at Lloyd’s initiative, launched in May 2019, has been at its heart with the twin aims of making it more attractive for new and diverse capital coming into the market, and to reduce the frictional costs of deploying underwriting capacity.
Asta was instrumental in the development of Lloyd’s ‘Syndicate in a Box’ (SIAB) framework, which is part of the Future Lloyd’s initiative, and the past year has seen the SIAB become an increasingly attractive way in which capital has sought access to Lloyd’s. We currently manage eleven live syndicates and five SIABs, three of which were launched in 2022 alone. These SIABs highlight the diversity of both capital and classes of risk which are now able to access the market.
Asta has also been closely involved in the development of a new captive syndicate model that allows captives to access the Lloyd’s market with greater efficiency and lower costs. Unlike a traditional syndicate, the captive syndicate model is unique in that the insured entity (the captive owner) is also the capital provider. This alignment of interest between a captive owner and its capital is furthered by the absence of a fronting insurer which in most cases becomes redundant due to Lloyd’s global licensing, allowing the captive syndicate to accept risk in multiple territories and jurisdictions.
“The Lloyd’s captive syndicate is a flexible platform designed to support any captive writing First Party or related Third Party risks.”
The Lloyd’s captive syndicate is a flexible platform designed to support any captive writing First Party or related Third Party risks – from the large blue-chip to the smaller privately owned captive. Typically these captives will have a multi-national risk exposure and are seeking a cost-effective alternative to fronting, more control over its working insurance layers, and reduced tax and regulatory risk.
Naturally, Lloyd’s remains determined to protect its brand. Companies underwriting at Lloyd’s not only need to adhere to the UK’s regulatory regime enforced by the PRA and FCA but must also meet the Principles for Doing Business which are operated and overseen by Lloyd’s.
While capital now has more ways to operate within Lloyd’s Asta’s experience and advocacy for our clients has become ever more important to enable them to overcome the regulatory hurdles, which do not stop when approval has been given. The benefits of our role as a strategic partner for clients have been proven through every step of their life cycle at Lloyd’s. We are viewed as a trusted partner by Lloyd’s, having advised multiple clients over last two decades on what is required to deliver success in the market.
“This new relationship … reinforces our role as a strategic partner from start-up to being an established, long term market participant.”
There are those who see third party management as adding an additional layer of cost to operating at Lloyd’s. It is clearly not the case as many have found when setting up their own managing agency. A good example of our model working for the long term is our partnership and support for IVE syndicate 2525. For over a decade we have worked alongside the syndicate which is highly profitable due to expert and successful underwriting, with assistance from Asta’s cost-effective, flexible management and operational support that has enabled the syndicate to focus on profitable growth. This year has seen Asta build on the benefits of our recent acquisition by Davies Group. This new relationship has increased our scope and allowed us to create a broader platform of services for clients of both firms that reinforces our role as a strategic partner from start-up to being an established, long term market participant.
Carbon Underwriting is another excellent example. A long-term client of Davies prior to our acquisition we have supported Carbon to complement its Managing General Agent (MGA) business that incubates other MGAs by establishing a SIAB at Lloyd’s. At the start of this year Carbon graduated to full syndicate status under Asta’s management. Carbon’s evolution highlights the way Asta can deliver new capabilities and options to Davies’ well-established MGA management capabilities. Today Asta manages aggregate client GWP of £2.2 billion for 2023, making us the largest third-party managing agency and the 6th largest overall at Lloyd’s.
“As the leading third-party managing agent, Asta is uniquely positioned to support Lloyd’s in keeping the market strong and vibrant.”
Since its inception, one of Lloyd’s greatest strengths has been its ability to reinvent itself with new talent, ideas, and risk appetites. In December Lloyd’s CEO John Neal, said the overall ambition of the Future at Lloyd’s Blueprint Two, is to make the Lloyd’s and London market a better, faster, and cheaper place to do business. “We know the work is far from over, but we’re making great strides in delivering the programme; now is a pivotal moment in our market’s transformation,” he added. As the leading third-party managing agent, Asta is uniquely positioned to support Lloyd’s in keeping the market strong and vibrant, and a place where people want to do business.