Posted in News on 15 Apr 2019
Last year, Lloyd’s of London made announcements that they would be taking a tougher stance on loss-making syndicates. A number of syndicates have been put into runoff over the past year, and remaining Lloyd’s syndicates have had to take action to demonstrate how they will improve performance, increase profitable business and develop new revenue streams.
As a result we have noticed a hardening of the market with syndicates making changes to their appetites and requirements, including increasing their minimum premiums and becoming stricter on the information required in order to quote and/or bind a risk.
As part of this initiative, syndicates have also been asked to reduce their operating expenses, which together with the above, has led to the modernising of many of the markets processes, including a renewed focus on electronic trading with the introduction of the PPL (Placing Platform Limited). PPL is a core component of the London Market’s Target Operating Model, or LM TOM, which aims to make it easier to transact insurance in the London market. It is an electronic placing platform which enables brokers and insurers to quote, negotiate, bind and endorse business electronically, removing paper from the process and creating a more efficient process. Clear digital information flows and audit trails are created for internal compliance and in the event of a claim the full trail can be easily retrieved.
PPL’s target is for 100% of risks to be placed electronically through the platform by the end of this year. While Lloyd’s syndicates are mandated to reach the PPL targets, participation by the London company market is not mandated and will not receive financial incentives or fines  . Nevertheless, the International Underwriting Association (IUA) members that participate in PPL electronic placements have risen from 29% of in-scope risks during the third quarter, to 41% in the fourth quarter of 2018. 
An article from the Insurance Journal in February this year confirmed that the adoption of PPL has exceeded its quarterly targets and named the top five syndicates that accepted risks on the platform during the fourth quarter were : 
- Beazley Syndicate 3623
- Hiscox Syndicate 3624
- Aegis Syndicate 1225
- RenaissanceRe Syndicate 1458
- Asta Syndicate 5886
While there has been a mixed response from London brokers around the use of PPL, Alesco’s view of the developments and the move towards the platform has been more positive. For the Latin American insurance market, it is possible that PPL will in fact open up more of the London market – providing more options for clients in the region.
Alesco is a specialist insurance and risk management business located in the heart of the City of London. Founded in 2008 by a team of experienced professionals, we provide a wide range of risk-management services and insurance solutions which are fundamental for protecting organisations. We work closely with underwriters in the London markets, in key global insurance centres, and with local broking partners in 150 countries.
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