Lloyd’s agencies want ILS as a permanent re/insurance market fixture


80% of Lloyd’s managing agents who responded said they would “like to see Insurance Linked Securities (ILS) products become a permanent fixture in the re/insurance market” according to a survey by the Lloyd’s Market Association.

As a follow-up to an event run by the LMA and Vario Partners on 11th May 2018, the Association polled senior executives from 25 managing agencies.

More than two thirds see a potential use for the new UK ILS framework in the next 12 months, 60% would like to see Lloyd’s Central Fund diversify its sources of capital through ILS, and 100% believe ILS transactions will widen to cover more risks, including cyber and legacy business, in the next three years.

The research provides insight into the concerns, opinions, and priorities of LMA members. Significant findings include:

  • 88% would like to see London leverage its underwriting expertise to gain access to currently uninsured risks using ILS capital
  • 36% of respondents believe Lloyd’s framework will need to change to accommodate more use of ILS

Ken Curtis, LMA director of finance and risk, said: “This research shows that market participants are extremely supportive of increasing the use of ILS generally, and doing so at Lloyd’s in particular. The new UK framework has already been tested by a Lloyd’s syndicate, and the market will explore ways to make future transactions even simpler and more efficient.”