Lloyd`s in the US market

LLOYD’S IN
THE US MARKET
Contents
1
2
3
3
4
5
6
About Lloyd’s
How Lloyd’s works
Financial strength and ratings
Global reach
Multiple classes, maximum innovation
Lloyd’s US – a major player
Contact us
ABOUT LLOYD’S | 1
About Lloyd’s
Lloyd’s is the world’s specialist (re)insurance market, conducting business
in over 200 countries and territories worldwide. We’re often the first to
insure new, unusual or complex risks, providing risk management solutions
for local, cross border or global risks of any size.
We bring together an outstanding concentration of specialist expertise and
talent, backed by excellent financial ratings which cover the whole market.
Since its humble beginnings in Edward Lloyd’s coffee shop in London
327 years ago, Lloyd’s has been at the forefront of developing new
insurance products to meet the changing needs of policyholders.
Learn more about Lloyd’s at
www.lloyds.com/aboutus
Lloyd’s international strategy
Lloyd’s Vision 2025 is the long term
strategy to reinforce Lloyd’s position as
the global center for specialist insurance
and reinsurance in a changing world. Read
more about our international strategy at
www.lloyds.com/strategy
HOW LLOYD’S WORKS | 2
How Lloyd’s works
Our unique structure creates a market based
on trusted relationships and expertise.
Many syndicates write a range of classes of
business and others specialize in one or two.
Lloyd’s is a broker market, with brokers
involved in all aspects of our distribution
channels. The majority of business written
at Lloyd’s is placed through brokers, who
facilitate the risk transfer process between
policyholders and underwriters.
The capital which supports syndicates’
underwriting is provided by members of
Lloyd’s, among them individuals, limited
partnerships and global insurance groups.
Much of the business written at Lloyd’s is
brought to specialist underwriters who price
and underwrite these risks. Many of the risks
placed at Lloyd’s are transacted on a face to
face basis in the underwriting room. Brokers
may also access the Lloyd’s market locally
through coverholders and service companies.
A Lloyd’s syndicate is formed by one or more
members joining together to accept risk.
A managing agent is a company set up to
manage one or more syndicates on behalf
of the members providing capital.
The Corporation of Lloyd’s oversees overall
risk and performance management of the
market, provides processing services,
manages the global network of licenses
and promotes the Lloyd’s brand.
Find out more about Lloyd’s market structure
www.lloyds.com/thelloydsmarket
Strength in numbers
The sheer scale of the market means it can
offer a huge diversity of products; the scope
of specialist broking and underwriting
expertise found together under the Lloyd’s
umbrella makes it unique.
94
SYNDICATES
of specialist
underwriting
experience and
talent.
3,872
coverholders
offering a local
route to Lloyd’s.
219
lloyd’s Brokers
bring business
from over…
200
Countries
and territories
The Lloyd’s underwriting room
94 syndicates are run by the 59 managing agents shown here as at 31 December, 2014
FINANCIAL STRENGTH AND RATINGS
GLOBAL REACH | 3
Financial strength and ratings
Lloyd’s unique capital structure, often
referred to as the Chain of Security,
provides excellent financial security
to policyholders and capital efficiency for
members. The Chain of Security provides
the financial strength that ultimately backs
insurance policies written at Lloyd’s and
the common security that underpins the
market’s ratings and license network.
Global reach
44%
2014 Financial performance
US$4.9BN
Profit before tax
88.1%
Combined ratio
US and Canada
US$41.7bn
Gross written
premium income
US$4bn
18%
Central assets
UK
For further details visit
www.lloyds.com/financialperformance
International capital supporting Lloyd’s
30%
UK listed and
other corporate
Bermudian
insurance industry
22%
9%
24%
2%
US insurance
industry
Worldwide
insurance industry
15%
13%
Individual members
(limited liability)
Individual members
(unlimited liability)
How leading rating agencies
assess our financial security
A+
Standard
& poor’s
A+ (Strong)
AA-
Fitch
ratings
AA- (Very
strong)
Rest of
Europe
Central Asia
and Asia Pacific
A
A.M. Best
A (Excellent)
8%
Other Americas
All figures and exchange rates as at December 31, 2014 (£1=$1.56)
Lloyd’s Chain of Security
Several
assets
Mutual
assets
11%
Lloyd’s global business breakdown
First link
Syndicate level assets
US$70,417m
Second link
Members’ funds at Lloyd’s
US$24,498m
Third link
Central Fund US$2,480m
Corporation US$161m
Subordinated debt/securities
US$1,381m
Learn more at www.lloyds.com/security
Callable layer
US$1,215m
4%
Rest of
the world
The Lloyd’s market provides insurance to over 200 countries and territories worldwide.
Our licenses in over 75 jurisdictions, supported by a network of local offices and
coverholders across the world, ensure access to insurance markets large and small.
Lloyd’s international network can underwrite local, cross border or global risks
of any size and complexity.
To find out more about what Lloyd’s can underwrite and where visit
www.lloyds.com/licenses
MULTIPLE CLASSES, MAXIMUM INNOVATION | 4
Multiple classes, maximum innovation
The scope of the Lloyd’s market and our underwriters’ talent and expertise produces innovative solutions across multiple
classes of business in the US and worldwide. We provide cover for all classes of business, including the following:
Marine
Lloyd’s is an industry leader in marine
business. Main classes include hull, cargo,
marine liability and specie (the insurance of
valuable property such as precious metals,
art or jewelry).
Property
The property sector consists of a broad
range of risks written worldwide. In Lloyd’s
largest market, the US, it is predominantly
made up of surplus lines business with
a weighting to the industrial and commercial
sectors, binder business of mainly nonstandard commercial and residential risks,
and specialist classes including terrorism,
power (electricity) generation, engineering
and nuclear risks.
Casualty
The casualty market at Lloyd’s comprises a
broad range of classes. The most significant
are general liability, professional liability,
management liability and medical
malpractice. Although shorter-tail in nature
than most casualty lines, accident and health
business is also included within this sector.
The US market is the largest single market
for Lloyd’s casualty business followed by the
UK/Europe, Canada and Australia.
Energy
The Lloyd’s energy sector includes a variety
of onshore and offshore property and
liability classes, ranging from construction
to exploration and production, refinery
and distribution. A significant part of the
portfolio is offshore energy business and
a large proportion of this is located in the
Gulf of Mexico.
Motor
Lloyd’s motor market primarily covers UK
private car and commercial/ fleet business.
Lloyd’s commercial/ fleet business is very
diverse, ranging from light commercial
vehicles and taxis to buses and heavy
haulage. In the US, Lloyd’s writes a variety of
transportation risk excluding
private passenger vehicles.
Aviation
Lloyd’s is an industry leader in the global
aviation market and writes across all main
business segments including airline,
aerospace, general aviation and space.
Airline (hull and liability) is the largest
segment but Lloyd’s aviation is also actively
involved in the underwriting of general
aviation (eg privately owned light aircraft,
helicopters and large private corporate
jets), airport liability, aviation product
manufacturers’ liability, aviation war/
terrorism and satellite launch/in-orbit risks.
Reinsurance
The reinsurance market at Lloyd’s covers
a wide range of classes, both short and
long-tail. Business is written as both
facultative and treaty, mainly on an
excess of loss basis. The predominant
class is property, which includes
catastrophe risks worldwide with a
significant exposure to the US market.
Emerging risks
From climate change to terrorism and
energy security to liability, businesses
need to understand emerging risks to
successfully lead their organizations
into the future.
Lloyd’s emerging risk reports bring
together the views of some of the
world’s leading academic, business
and insurance experts.
We analyze the latest information on
emerging risks to ensure we’re able
to provide new risk management
solutions in a fast changing world.
Read more about emerging risks, visit
www.lloyds.com/emergingrisks
LLOYD’S US – A MAJOR PLAYER | 5
Lloyd’s US – a major player
Breakdown of US classes of business 2014
Lloyd’s has been a major force in the US insurance market for over a
century – from the devastating San Francisco earthquake of 1906 to
recent catastrophes such as Superstorm Sandy.
Underwriters at Lloyd’s are licensed
insurers in Illinois, Kentucky and the US
Virgin Islands and are approved surplus
lines insurers in all US jurisdictions.
Lloyd’s is also an accredited reinsurer
in all 50 states.
Throughout its long relationship with the US,
Lloyd’s has provided American businesses
with creative solutions for their risk and
private entities management needs.
Over the course of the 20th century, new
risks posed by a growing US economy
provided Lloyd’s with opportunities to
expand its portfolio beyond natural
catastrophes in coastal states to a wide
range of products including management
and professional liability, construction,
real estate, transportation, renewable
energy, cyber risk, terrorism, sports and
entertainment and celebrity body parts.
38% of Lloyd’s global
premium comes from
the US. In 2014 this
accounted for
US$14.6bn.
33%
10%
2%
17%
7%
4%
20%
5%
2%
Property (D&F)
Property treaty
Casualty
Marine
Energy
Accident and health
Largest lines of business in Lloyd’s top ten states
Lloyd’s leads the
way in the excess
and surplus lines
and reinsurance
markets IN THE US.
Property
Energy
Property and liability
Breakdown of US business by category 2014
Surplus lines
Licensed
56%
1%
Liability
36%
7%
Reinsurance
Lloyd’s share of the excess and surplus market in CA, FL, GA,
LA, MA, NC, SC and TX ranges from 20 – 30%. Catastrophe
capacity provided by Lloyd’s fills a critical need in these states.
Exempt
Lloyd’s Market Intelligence products contain further
analysis and information on Lloyd’s business in the US
www.lloyds.com/us-mi
Aviation
Casualty treaty
Overseas motor
CONTACT US | 6
Contact us
Contact our local Lloyd’s office in the US for
information and assistance about how to access the
Lloyd’s market.
Atlanta
Rodney Smith
678 775 6832
[email protected]
Los Angeles
Richard Magrath
310 706 4100
[email protected]
Boston
Glenn Dorr
781 968 5423
[email protected]
New York
Hank Watkins
212 382 4090
[email protected]
Chicago/Frankfort, KY
Pat Talley
312 407 6200/502 875 5940
[email protected]
USVI
Hank Feuerzeig
340 715 4443
[email protected]
This brochure provides general information only and does not constitute solicitation of business. All US business
underwritten at Lloyd’s must be placed in accordance with US regulatory requirements.
Coverage must comply with local law. Lloyd’s America, Inc. is not licensed as an insurer in any state. Underwriters at
Lloyd’s are licensed only in Kentucky, Illinois and the US Virgin Islands, and are eligible surplus lines insurers in all US
jurisdictions. Lloyd’s underwriters are also accredited reinsurers in all states. Lloyd’s is regulated by the Financial
Conduct Authority and Prudential Regulation Authority.
© Lloyd’s 2015 All rights reserved. Lloyd’s is a registered trademark of the Society of Lloyd’s.
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For more information about Lloyd’s in the US, visit
www.lloyds.com/us
Global offices
Africa | Asia-Pacific | Europe | MIddle East North America | South America
www.lloyds.com/globaloffices
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