On Wednesday the London market tuned in for the announcement of Lloyd’s focus for the coming year.
It was an hour-long presentation and short Q&A from the corporation’s head of market oversight, Peter Montanaro, and chief of markets Patrick Tiernan.
The level of information was such that Tiernan was asked whether there was simply too much for the syndicates to digest.
His response was to say that the areas of focus and the new principles-based regulatory approach had not been “created in a bunker” rather in collaboration with the managing agents, and syndicates which will need to operate under the new regime.
However, for those who tuned into the virtual briefing it was actually what was not mentioned that might have alarm bells ringing rather than the data and graphics which were presented.
Tiernan said that the hardening market will see Lloyd’s premium income increase but warned that while the market was willing to be agile and responsive to those syndicates which are deemed to be “light touch” underwriting discipline would be key.
The market will also look to drill down on delegated authority business to understand the risks and the pricing and will continue to monitor both the syndicates and risks which are deemed to be underperforming.
Lloyd’s has said it will get tougher with those organisations which who are not delivering on diversity and inclusion, alongside a zero tolerance for any inappropriate behaviour
Tiernan said that the cost of doing business in the market was reducing but was still far from acceptable, pledging that work will be undertaken in the coming year to get close to the costs of operating in the company market.
It was a fact filled hour with data and projections galore and it was clear the aim was to accentuate the positives, with Tiernan saying the market did not want to put “rocks on the road”.
What both Tiernan and Montanaro did not say, other than the briefest throw away remark, was anything about the market’s £400 million plus blueprint for the future.
No mention of how the initiatives will help to reduce the frictional costs, despite a determination they will fall in the year ahead. No mention of any of the initiatives which will enhance the ability to monitor delegated authority business, the reporting systems, the move away from a bordereau and the ability the blueprint will provide to access risks which had previously been uneconomic.
With a sizeable proportion of the estimated £400 million cost of the blueprint’s proposals already having been spent you have to ask why Lloyd’s, if not shouting from the roof tops, did not provide any details as to when of any of the initiatives will come online in 2022 and the benefits they will deliver.
The London market has always had a healthy dose of scepticism around the process reform plans which have been launched to a huge fanfare only to wither on the vine in the past three decades.
Given the market’s sizable frictional costs have been at the heart of why the blueprint had to be delivered, hopefully the silence in this case does not speak volumes.
Editor, Emerging Risks