Index could spark interest for new capital market products

Lloyds 450

Lloyd’s is set to launch an insurance index in mid-2016, the market announced today.

The index will be the first for diversified risk, showing loss ratios and focused on insurance performance.  

A Lloyd’s statement said an index would give data to managing agents, brokers and other insurers and could form the basis of index-related products for the wider capital markets.

The index would be published quarterly and subscribers would be able to see data across the whole market.

Lloyd’s chairman John Nelson said: “This is an exciting and innovative development for Lloyd’s. Our continued success is dependent on being able to develop the tools the market needs and also reflect the environment it is operating in.”

Lloyd’s said that more indices based on specific classes of business could come later.

The insurance market will now seek market opinion on the index and speak to the regulator about how it would be governed.

Nelson added: “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.”