Lloyd’s of London has announced a new strategy that will see it strengthen its focus on the US reinsurance and excess and surplus (E&S) insurance market, where it is the market leader.
As part of this strategy, which it said is to “focus on its core markets”, Lloyd’s will relinquish its admitted licences in the US Virgin Islands (US VI), Kentucky and Illinois, which together represent $215m (£170.5m) or 1% of Lloyd’s annual US premium income.
Lloyd’s said the decision was not related to the local markets or the business it writes under the licences, rather it was a recognition that E&S business is a “better fit” for its underwriters
given the market’s “innovative nature and expertise” in emerging risks.
Lloyd’s added it believes that the product flexibility of the E&S space is “key” to realising Lloyd’s strategic vision.
The announcement which was made in a market bulletin by Peter Montanaro, head of Syndicate Capability OversightIn, said: “Lloyd’s understands that the market and our key stakeholders will need time to make changes to their commercial plans. We are therefore providing a window of 12 months during which new business will continue to be allowed. After 1st July 2021 no new business or programs will be accepted on the US licensed platforms.
“Regarding existing and renewal business, Lloyd’s will be working with the regulators in the licensed territories to develop plans to non-renew this business with as little disruption to the local markets and policyholders as possible. We will issue further and more detailed guidance in due course once arrangements with the regulators have been agreed.”