Through coverholding, underwriting agents around the world have built longstanding and extremely beneficial relationships with carriers in Lloyd's and the London wholesale insurance market.
Delegated authority arrangements give managing general agents and other coverholders access to risk capacity with a broad and specialist appetite, and deliver high-quality, appealing risks directly to London insurers. The system has worked for everyone for more than a century. Today, however, many such partnerships are under threat.
|Ever-increasing regulatory requirements
In 2014, London market trade bodies commissioned consultants to report on the market's challenges, and to outline possible solutions. Their report declared that London's continued prosperity would rely on its being cheaper, easier, faster and better. Almost everyone agrees with their prognosis, but these goals have not been reached for most delegated authority business.
Instead, London has become more expensive and cumbersome. Ever-increasing regulatory requirements now demand that underwriters possess much more, and increasingly granular risk and claims data. Bordereau reporting is woefully inadequate to deliver the detailed level of information required.
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