Rebalancing Lloyd’s of London Reinsurance Capacity

Transparent and compliant risk capacity trading

The challenge

Founded in a coffee house in 1688, Lloyd’s of London has become the world’s marketplace for underwriters to pool and spread specialist risk. In 2019, 110 syndicates wrote £9.6 billion of gross premiums on business produced Lloyd’s brokers.

Lloyd’s of London needed a mechanism to enable its members to trade capacity and rebalance their insurance risk. Lloyd’s identified auction as offering a transparent, open market mechanism for efficient trading, which would allow both Lloyd’s of London and its members to maximise value and transparency. Lloyd’s needed to develop a new technology-based platform to replace a largely manual process.

The solution

Perfect Channel was approached as the complexity of Lloyd’s market required specialist auction and insurance expertise. Working systematically to understand the specific complexities of the insurance market and the trading of risk capacity, Perfect Channel’s solution allowed for efficient and fair trading by members.

Key features include:

  • Automated subscription & tender bid upload
  • Automated and bilateral trade matching process
  • Asynchronous bid validation
  • Filtering and search functionality
  • Full audit reporting
  • Integration with Lloyd’s back end system and security framework

The outcome

Agents for insurance syndicates now have a secure and seamlessly integrated online marketplace for the fair trading of their capacity. The auctions run four times per year and allow agents to save time, trade more efficiently and reduce operational risk, while also ensuring that specific auction rules are followed, ensuring real time compliance.

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