Binding authority contracts to be up to 36 months long
The Managing General Agents’ Association (MGAA) and the American Association of Managing General Agents (AAMGA) have hailed the Lloyd’s announcement that multi-year binders will come to the London market.
Last week saw the news that the London market will become more globally competitive with the news that the London Market Target Operating Model (TOM) will let syndicates write binding authority contracts for up to 36 months.
Currently London market binding authorities cannot exceed 18 months and are often annual, in contrast to insurance markets in other parts of the world.
MGAA managing director Peter Staddon said: “Our members will be delighted with this initiative and, coupled with the progress already made in the coordination of coverholder audits, this represents real progress in the TOM.”
AAMGA executive director Bernie Heinze said: “We have been watching the development of the Target Operating Model initiative with great interest and the delivery of multi-year binders represents a huge step forward in the drive towards making it easier to do business with London.”
Last week saw the news that the London market will become more globally competitive with the news that TOM will let syndicates write binding authority contracts for up to 36 months.
Currently London market binding authorities cannot exceed 18 months and are often annual, in contrast to insurance markets in other parts of the world.
But part of the TOM project has been acting to update this, spurred on by competition concerns from market players.
MGAA general manager Jane Comerford said: ”I am aware of a number of our businesses that considered the restriction to 12 months contracts as a barrier to doing business with Lloyd’s. I’m sure this decision is both good news for our members but may also open up new opportunities for syndicates.”
Miller head of programmes Gary Clark said: “Coverholders have raised concerns that restricting binding authority contracts to 12 months puts the market at a disadvantage to domestic markets around the world where longer contracts are already available. Multi-year contracts is an example of the London Market listening to and addressing the concerns of its clients and member firms.”
The new Lloyd’s Market Association wordings for mult-year binding authority contracts have been finished.
London Market Group TOM sponsor and director of operations Shirine Khoury-Haq said: ”Our coverholders have told us that the ability to write multi-year binders at Lloyd’s will make it easier to do business and we are delighted to have come up with a process that delivers this requirement.
“This, in addition to co-ordinated coverholder audits, is a significant development in the delegated authorities’ workstream for TOM.”
The change will take place from 1 January 2016.
The TOM delegated authority project will now focus on enabling straight-through processing, as well as further improvements to centralised audit provision and coverholder applications.
The London Market Group (LMG) has hired Adrian Thornycroft as programme director of the London market Target Operating Model (TOM).
Thornycroft was Canopius Group head of business projects and transformation.
In his new role, Thornycroft will lead the programme and be responsible for its individual projects.
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