In its annual Lloyd’s Coverholder Management Survey, global accounting and advisory firm Mazars has reported that Lloyd’s Managing Agents have increasingly widespread concerns about resources, conduct risk, and tech reliability, despite confidence in the new Lloyd’s Market Coverholder Audit Scope (LMCAS).
Mazars’ report found that 55% of Lloyd’s Managing Agents are struggling with resources in their delegated authority teams, a trend that becomes particularly worrying when compared with 22% figures from 2010.
Additionally, 90% of respondents did not believe the conduct risk regime was falling away, and a similar number regarded ATLAS as unreliable or not up to date, although 79% claimed they would use AiMS for third-party administration (TPA) instructions in the future.
The 28 Managing Agents surveyed by Mazars represent roughly half of the Lloyd’s market, and Mazars expects their concerns to intensify over 2018.
In contrast, 83% of respondents felt the LMCAS had improved the quality of audits of coverholders by managing agents, with 76% insisting on conducting delegated authority audits with the LMCAS template.
Moreover, Mazars found that Lloyd’s Managing Agents now tend to report on a ‘quarterly basis’, rather than ‘annually’ or ‘never’, which it considers to be an encouraging trend.
Michael Campbell, Delegated Authority Director, UK at Mazars, said: “This year’s survey, our fifth, has produced some very interesting insights, both positive and potentially worrying for the sector.
“Some of these can be identified as on-going trends, while some results have been influenced by a broadening of the scope of the survey to focus even more heavily on conduct risk culture within coverholders and consumer outcomes, including anti-bribery, corruption and money laundering cover.
“With a significant majority (73%) of respondents generating between 25% and 50% of their revenues from delegated authority underwriting, it is clear that these are areas of critical importance to the sector.”
