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Lloyd's Leaving US Admitted Market To Focus on Reinsurance, E&S

Investing Money Stocks
July 21, 2020

Lloyd's of London has announced that it will relinquish its admitted market licenses in the US as part of a plan to strengthen its focus on the US reinsurance and excess and surplus (E&S) markets.

Lloyd's said it will give up its admitted licenses in Illinois, Kentucky, and the US Virgin Islands. The admitted business in those jurisdictions together represents $215 million in annual premium income, about 1 percent of Lloyd's US premium income, Lloyd's said in a market bulletin announcing the move.

"This decision was not related to the local markets or the business we write under the licenses, rather it was a recognition that E&S business is a better fit for our underwriters given the market's innovative nature and expertise in emerging risks," the Lloyd's bulletin said. "Lloyd's believes that the product flexibility of the E&S space is key to realizing Lloyd's strategic vision."

The bulletin said that Lloyd's understands that the market and key stakeholders will need time to make changes to their commercial insurance plans, so it will continue to allow new business through its admitted US platforms for 12 months. After July 1, 2021, no new business or programs will be accepted on the US licensed platforms.

"Regarding existing and renewal business, Lloyd's will be working with the regulators in the licensed territories to develop plans to nonrenew this business with as little disruption to the local markets and policyholders as possible," the Lloyd's bulletin said.

Lloyd's said it would issue further and more detailed guidance once it has agreed with regulators on arrangements for the move.

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