lloyd s of london observation and speculation l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Lloyd’s of London: Observation and Speculation PowerPoint Presentation
Download Presentation
Lloyd’s of London: Observation and Speculation

Loading in 2 Seconds...

play fullscreen
1 / 14

Lloyd’s of London: Observation and Speculation - PowerPoint PPT Presentation


  • 316 Views
  • Uploaded on

Lloyd’s of London: Observation and Speculation. Todd J. Hess Chief Risk Officer and Deputy Swiss Re Underwriters Agency Casualty Actuaries in Reinsurance Seminar June 4, 2002. Capital Providers. Bespoke Names Corporate Capital MAPA Conversion Vehicles Qualifying Quota Share Reinsurance

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Lloyd’s of London: Observation and Speculation' - salena


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
lloyd s of london observation and speculation

Lloyd’s of London:Observation and Speculation

Todd J. Hess

Chief Risk Officer and Deputy

Swiss Re Underwriters Agency

Casualty Actuaries in Reinsurance Seminar

June 4, 2002

capital providers
Capital Providers
  • Bespoke Names
  • Corporate Capital
  • MAPA
  • Conversion Vehicles
  • Qualifying Quota Share Reinsurance
  • Banking Arrangements/Gearing Structures

Lloyd’s of London

chain of security
Chain of Security
  • Syndicate vs Capital provider links
  • Premium Funds
    • Trust Funds
    • Includes prior year reserves
  • Solvency Reserves
  • Funds at Lloyd’s (FAL)
  • Central fund
    • Actual Funding
    • Reinsurance Layer
    • callable funds

Lloyd’s of London

funds at lloyd s
Funds at Lloyd’s
  • RBC
    • set to assure overall capital adequacy
    • reserve and underwriting (new business) risk
    • minimum levels but no maximum
  • Solvency reserves
    • Coming into line
  • Nature of Capital

Lloyd’s of London

chain of security amounts
Chain of Security--Amounts

1st Link: Premium Trust Funds £13.5 B

2nd Link: Capital Held at Lloyd’s £ 7.7 B

3rd Link: Other declared assets £ 0.3 B

4th Link: Lloyd’s Central Assets £ 0.4 B

(central fund reinsurance and callable assets not included)

Aggregate Resources £21.9 B

Current and Future Liabilities £17.6 B

As of 12/31/2001

Lloyd’s of London

how can it get that bad
How can it get that bad?

Lloyd’s of London

capital s funding flows
Capital’s Funding Flows
  • RBC (part of FAL)
  • Premium trust funds
  • Solvency reserves (part of FAL)
  • Cash call
  • Closing the year

Lloyd’s of London

where are the weak links
Where are the weak links?
  • Potential questions:
    • Premium trust funds: not necessarily released by US regulators
    • Cash call: if willing to stay in the market. Not an option in the unlimited liability days.
    • Solvency reserves (part of FAL): if posted at coming in line date
  • Solid
    • RBC (part of FAL)
    • Central Fund
    • Central Fund Reinsurance

Lloyd’s of London

a comment a question
A comment, a question

Chain is a poor Metaphor: Not as weak as the weakest link--indeed, as strong as the strongest.

Would other capital providers answer the call if central fund is depleted?

Lloyd’s of London

lloyd s strengths
Lloyd’s Strengths
  • Strong Brand
    • Marketplace where difficult things get done
    • Leader in important markets
  • Global Licenses
  • Mutualized Security
  • Committed Broker Support
  • Capital model not conventional insurance

Lloyd’s of London

chairman s strategy group reforms
Chairman’s Strategy Group Reforms
  • Annual Accounting
    • First reported this year along with traditional 3 year accounts
  • End unlimited liability and annual venture
  • Lloyd’s as franchiser
    • Caution in fundamentally unprofitable lines
    • Limit multi-year contracts
    • Control use of delegated underwriting authority
    • Reduce over-reliance on reinsurance

Lloyd’s of London

my personal speculation on the future of lloyd s
My personal speculation on the future of Lloyd’s
  • Lloyd’s will survive as a marketplace
  • It will continue to be the pre-eminent center for Marine risks for the whole world
  • It will be be important for all lines for territories outside the US, but less in the US, especially reinsurance
  • Mutualized security will be abandoned (sadly)
  • The franchise model will add credibility despite separately rated syndicates

Lloyd’s of London

references
References

www.lloydsoflondon.com

Lloyd’s global results 2001, including the Annual Financial Statements and Annual Report obtained from website

Lloyd’s of London