Lloyd’s of London to launch its own insurance-based index

Lloyd’s of London is to launch its own insurance based index in mid-2016, which it said will be the first index for diversified risk, showing loss ratios and focused on insurance performance.

The venerable insurance marketplace, which was founded in 1688, added that the availability of detailed insight into the performance of the market will provide managing agents, brokers and other insurers with new options for managing risk and form the basis of index-related products of interest to the wider capital markets.

“Lloyd’s position, as the only insurance market in the world, means it has access to an extensive range of high quality data, both current and historic, and is therefore uniquely placed to provide an index of diversified underwriting risk,” it added.

The Lloyd’s Index will show loss ratios – premiums versus claims – for the Lloyd’s market on an aggregated basis, and will focus entirely on insurance performance. Subscribers to the index, which will be published on a quarterly basis, will be able to view data on a whole market basis. Lloyd’s plans to make available additional indices defined by class of business in due course.

Lloyd’s will seek market input on the initiative in the months ahead, as well as discussing appropriate governance measures with the UK regulators.

“This is an exciting and innovative development for Lloyd’s,” said its chairman, John Nelson. “Our continued success is dependent on being able to develop the tools the market needs and also reflect the environment it is operating in.
“I believe this proposal would be advantageous to both Lloyd’s and non-Lloyd’s participants, keeping pace with the evolving insurance industry and the new sources of capital now available. We look forward to hearing the views of the market.”

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