The Lloyd’s Market Association (LMA) has announced the establishment of a new Delegated Authority Committee (DAC), designed to both inform and guide the evolution of this aspect of Lloyd’s underwriting, distribution, and claims.
According to the LMA, this type of business accounts for 40% of the Lloyd’s market’s annual gross written premium, but does not have a dedicated committee to give focus to the future business model of delegated business.
To start, the new DAC will be tasked with engaging with customers, clients, and the market, with a view to establishing a business model for the future. The LMA states that the new future model should leverage the ongoing initiatives while at the same time address distribution challenges and acquisition costs to the benefit of MGAs, coverholders, brokers, and Lloyd’s customers.
The new committee will also seek to influence the heightened regulatory attention to distribution, oversight, costs, performance, and service quality.
Nigel Roberts, Head of Distribution at AEGIS and chair of the DAC, said: “The market must consider its broad DA strategy carefully, through the lens of our coverholders, brokers and customers. This includes developing the DA business model that can deliver front end change enabling us to be flexible in how we source and service our clients’ and customers’ needs, whilst delivering bespoke and innovative products and solutions for distributing business itself. Furthermore, this should be achieved from a lower cost base.
“The Committee will view DA challenges through a customer and client lens, and help to provide a broad-ranging, top-down view that supports managing agencies’ ability to make the most of their business opportunities and their highly valuable delegated authority relationships.”
The DAC features a multi-disciplined group of senior specialists from across the Lloyd’s MGA community, reports directly to the LMA Board, and has established embedded feedback loops to the Lloyd’s marketplace and also the London International Insurance Brokers Association (LIIBA).
Lee Elliston, Claims Director at the LMA, added: “Delegated Authority business and the related client and customer base is critical to the Lloyd’s market. Establishing key changes to our business model, in direct collaboration with our value chain, will ensure that benefits can be delivered to all parties, reducing acquisition and expense costs, streamlining the sourcing and servicing of business to remove friction, and supporting the growth and innovation of our market and our clients.”