View this article online: https://www.insurancejournal.com/news/international/2002/08/01/20357.htm
Demand to put new capital into Lloyd’s of London is triggering one of the London- based insurance market’s most significant periods of mid-year growth.
Speaking in Canada last weekend, Lloyd’s Director of Worldwide Markets, Julian James, told an audience of insurers and brokers that, with the insurance market at its most attractive for a decade, Lloyd’s syndicates are heavily engaged in capital raising programs to take advantage of the conditions.
Market capacity has already risen from $19.1 billion at the start of 2002 to a new mid-year high of $19.6 billion.
In addition, $671 million of Qualifying Quota Share (QQS) arrangements have been approved to further expand underwriting capacity, with over $784 million more awaiting approval. Much of this QQS capacity has come from Bermudan reinsurers and major European firms.
Additional capital raising could boost basic capacity as high as $20.2 billion by year-end, without taking QQS arrangements into account. These requests to increase capacity are, however, subject to approval by Lloyd’s.
“As stock markets around the world continue to underperform, insurance premiums are rising and are expected to provide positive returns for several years to come,” James commented. “This demonstrates the contra—cyclical nature of insurance markets like Lloyd’s. But it is not our intention to allow Lloyd’s to be flooded with so much capital that a soft market is created. Indeed, we are very aware of this possibility. These strong trading conditions combined with our program of radical but sensible modernization proposals are creating a modern, transparent and profitable business fit for the future.”