An agenda for change at Lloyd’s
Lloyd’s Market Association CEO Sheila Cameron is looking forward to an action-packed year: new regulation, digitisation and human resources development are all in the mix
The Lloyd's Market Association (LMA) represents its members’ interests to organisations including governments, regulators, and the market's central supporting body, the Corporation of Lloyd's. All 49 Lloyd's managing agencies, who write around £36bn of premium per annum, and all Lloyd's members agents, are members of the LMA.
The LMG is a cross-market body that promotes the interests of the London insurance market across Lloyd's managing agents and the Corporation of Lloyd's, the IUA and LIIBA. Historically the LMG has been focussed on modernisation of market infrastructure and processes.
What are the important regulatory changes in the pipeline, from an LMA perspective?
The LMA is dedicated to making the Lloyd’s market a better place and, as such, believes it has a firm role to play in supporting regulatory change. It plans to implement a comprehensive regulatory engagement strategy, focused on Lloyd’s, Lloyd’s Insurance Co SA [LIC a.k.a. Lloyd’s Europe], Financial Conduct Authority, Prudential Regulation Authority, European Insurance and Occupational Pensions Authority and HM Government. The LMA will work with LIC and the London Market Group on the 2024 review of the Insurance Distribution Directive and LIC’s model, based on the LMA’s Legal Committee and Regulatory Committee views. It will also support Lloyd’s on the roll-out of the market data collection and reporting project, linked to the overall Lloyd’s data reporting strategy.
We welcome the ongoing efforts to review compliance and reporting burdens on UK firms and ensure they are suitable for the UK markets. We will gather views from our members in 2023 and submit a response to the Solvency II consultation by the deadline in May.
What’s your stance on the UK’s proposed divergence from the EU’s Solvency II regime?
We do not want to see the UK regime diverge too far from recognised Solvency II or similar regimes around the world. Tweaks to capital requirements that promote investment are welcome but maintaining equivalence will also be vital to maintaining market competitiveness.
Equivalence in regulatory standards, even if not formally recognised, is hugely beneficial for the London market to attract and retain business as a global centre for insurance.
Are you at one with Lloyd’s on its modernisation programme?
In 2023 we will engage, challenge, and where appropriate, partner with Lloyd’s on the delivery of Future at Lloyd’s. This includes promoting and supporting preparation for, and adoption of, Future at Lloyd’s and the supporting DXC service proposition, in the managing agent community. Through the LMG’s Data Council, we will drive the adoption of a digitised marketplace, using agreed processes and standards via digital placement platforms. We will engage both Lloyd’s and the claims community to articulate a unified claims vision and work collaboratively with Future at Lloyd’s teams to define the services and solutions needed to realise the claims vision.
Other priorities will be to influence, support and drive optimisation of delegated authority business processes and practices, and to support Lloyd’s in engaging with the market on the future of the Underwriting Room.
And Blueprint Two specifically?
As the chair of the Data Council, I am looking forward to supporting the delivery of the foundations for the Lloyd’s Blueprint Two modernisation programme at the end of Q1 2023. This will mobilise a data-driven shift to digitisation. A consultation is set to launch in February that will support London market firms around the core data record (CDR) and the new digital gateway. The results of this consultation will guide the market through the adaptation of the new market reform contract (MRC) v3, a key element of the programme delivery at the end of Q1, and the launch of CDR v3.2. There will be a six-month transition period for adoption. By the end of Q3, firms will be expected to have adopted MRC v3. It is thought that these standardised processes will spearhead the much-needed evolution of the London market.
Other priorities will be to influence, support and, where possible, drive optimisation of delegated authority business processes and practices, and to support Lloyd’s in engaging with the market on the future of the Underwriting Room.
Developing talent will be an issue for the insurance industry as a whole as people return to the office: what’s the LMA planning for 2023?
Education, developing training programmes and increasing technical expertise remain key aims of the LMA’s 2023 objectives. The LMA will continue working with market SMEs to scope, develop and implement an Academy offering of ESG technical expertise. It will support Lloyd’s in identifying training solutions for the change in approach and new leader responsibilities required by the revised Claims Scheme. The LMA will promote and influence the development of a framework for early talent into the claims market. It will also ‘operationalise’ the wordings/legal trainee programme launched this year.
Do you expect to see fewer headlines about Lloyd’s and ESG issues (either workplace culture and climate) in 2023?
Whilst we can’t predict the news cycle moving into 2023, we launched the LMA Charter this year to tackle market culture and foster an inclusive, trusted, passionate, bold, and united community. The LMA and Lloyd’s are united in the view that the market can and will change, and that change must be rapid and permanent.
With regards to representation, I think we should expect to see headlines about diversity until targets are met, not only in the non-executive community, but at executive board level. We need to see more women and people who identify as coming from an ethnic minority in senior roles as we head into 2023. The LMA is committed to reaching its target of 30% of board members being female and/or from an ethnic minority by the end of 2023.
Many LMA members are partnering with their clients and the wider community to support the transition to net zero. We will continue to listen to our members and provide further support for wider ESG issues as appropriate.