Sheila Cameron's speech to Lloyd's managing agency CEOs


 Modernised syndication at Lloyd’s: how might it all work? 

20 January 2020 | 5 minute read

Released in September, the Future at Lloyd’s Blueprint One outlined proposals to modernise the way risk is syndicated within the market. The goals are clear: modernised syndication seeks to deliver best-in-class underwriting, by raising underwriting and claims standards for leaders. A secondary objective is to make following simpler and reduce market operating cost by removing duplicated effort, therefore providing a more efficient service at a reduced cost to customers.

In late 2018, Lloyd’s’ Chairman Bruce Carnegie-Brown spoke about how insurance is a non-correlated asset class with the bond and equity markets, and how non-traditional capital has already figured out how to leverage lead underwriters’ intellectual property through the ILS market. He stated that the market should create a new lead follow model that could create an alternative revenue stream for insurers through the fees associated with leading such a model, and that such revenue could then be recycled into innovation activities. This formed the foundation for modernised syndication in Blueprint One.

So how might a new lead follow model work in practice and how will it seek to raise standards? Leaders’ standards will focus primarily on the expertise and knowledge required to demonstrate best practice within underwriting, claims and compliance. Follower standards will be fewer in number and will focus on portfolio management; a skillset that both leaders and followers will be expected to evidence. Managing agents will choose, by class of business, which set of standards they wish to follow, self-attest at board level that they meet the chosen standards, and therefore define themselves as leaders or followers in each class of business they underwrite. Those who lead in a class can also choose to follow in that class. The Lloyd’s Market Association, together with Lloyd’s, is currently working on the definition of what those standards will look like. Leader standards will, in many cases, reflect the activities already undertaken by successful managing agents and each managing agency will make its own choices for the syndicates it operates.

Lloyd’s oversight will take place as part of both the business planning process and the standards attestation, just as it does today. Lloyd’s will use a range of inputs to assess leaders’ and followers’ ability to meet the required standards and will review the syndicate’s own self-assessment. As part of the business planning process, managing agents will submit business plans that clearly identify their strategy and appetite for writing business as leader and follower. Lloyd’s will approve or decline these plans in the same way Lloyd’s does today. It is important to note that the level of Lloyd’s oversight on leaders and followers will be proportionate to the risk they present, with greater oversight of leaders compared to followers.

But nothing will change overnight. A detailed design of leader and follower standards has begun, and a pilot will be run during 2020 to test the process and implement changes based on lessons learned. It is proposed that the 2021 planning process will include modernised syndication for the pilot class, which will go live in January 2021. The 2022 planning process may well include modernised syndication choices in some additional classes and / or methods of placement. The end state process will only become completely live once the Lloyd’s risk exchange and complex risk platforms are ready to use.

Until then, brokers will continue to place business, just as they do today. This will only change once the complex risk platform and risk exchange go online. We envisage followers’ risk appetite will then be contained on the platforms and, once a leader has been agreed, brokers can choose from a pool of followers whose risk appetite matches the risk on the platforms. Followers themselves can monitor such risks through their portfolio management expertise, and should they still wish to review a particular risk, they can always choose to do so.

Strong collaboration between underwriters is an important strength of the Lloyd’s market, as is the role of followers in performing checks and balances on leaders. Leaders will of course also be permitted to act as followers in classes where they have chosen to lead. A new, stronger and easier consortium model will enable smaller businesses to thrive within the Lloyd’s market. The structure of leaders’ remuneration for other business remains to be worked out but will not come into play until the technology platforms are ready to go. Leaders will bear an as-yet undecided level of liability to followers just as they currently do under the Claims Scheme. Followers can choose to rely on the leader’s underwriting standards and risk data, or they can choose to review the risk themselves in their follow capacity.

Critically, the decision to lead or follow will always remain a choice. Providing the standards are satisfied, any syndicate, regardless of its size, will be able to remain or become an expert leader in its chosen classes, or follow recognised leaders when they choose to do so in either an active or passive manner.

Standards lie unashamedly at the heart of this model; with modernised syndication in place, all insurances underwritten at Lloyd’s will match the very high underwriting and claims standards that the world expects from our marketplace. Along the way, it will create greater choice for managing agents and their capital providers, and a much more efficient market for customers, who will no longer need to pay for the duplication of services by every participant on their risks.

Published in Insurance Day on 19 December 2019 

Your chance to shape our future


Once-in-a-generation change is under way at Lloyd’s. The market is charting a transformation that will return us to the front of the international insurance flotilla. It is a real opportunity to reinvent our market, and lead the world into the future.

The need for change is incontrovertible. Disruptive technology is leaping ahead of Lloyd’s entrenched processes. Alternative capital is making its mark, but finds Lloyd’s difficult to enter. Our products cover only about half of clients’ risk managers’ top risks, we are not cost-competitive, and we are short of talent for the future. We must act now to make our 300-year-old institution fit and competitive for the next three centuries.

For the past four months, the LMA Board has been closely involved in defining Lloyd’s purpose, creating a new Lloyd’s value proposition, and outlining the market’s future strategy. The result, The Future at Lloyd’s (, is part of a genuinely collaborative process, not a directive pushed outwards from the centre.

Together we identified various possibilities that are before you now, but they are not set in stone. We want your input. Everyone is likely to support some proposals strongly, suggest or endorse modifications to others, and probably find some disagreeable, but we must and will reach consensus. Our future depends on it.

Six new ‘transformational initiatives’ are outlined in The Future at Lloyd’s:

  1. evolve our platform for underwriting complex risks
  2. create a low-cost risk exchange for straightforward risks
  3. devise a simple, effective structure for capital of all kinds to back Lloyd’s
  4. implement an automated, next-generation claims service
  5. construct a simplified process to launch new syndicates and products
  6. develop a resource ecosystem to support innovation and service.

These initiatives will have to be underpinned by a new, alternative lead-follow model, something the LMA Board has worked closely with Lloyd’s to map out.

Lloyd’s says some of the initiatives could be operational as early as 2020, so there is no time to waste. That said, the LMA will be focussed on ensuring that any initiative implemented is thought-through, tested, and workable before it goes live.

The market entered a ten-week consultation that presented the opportunity for practitioners to help shape the market’s future via an online survey and Lloyd’s forums. If you have any questions or would like to provide further feedback, contact the LMA expert looking after your specific area of interest for an informal conversation.

The LMA will continue to gather your views informally, and to explore them formally through our many market committees.

Feeding back through the LMA has some advantages. First, Members may not wish to make some of their observations directly to Lloyd’s. The LMA provides a channel of anonymity. More importantly, you will help to form the LMA’s collective view, which ultimately I will present to Lloyd’s on behalf of all members. We will also deliver an LMA response to the online survey. Of course, you may want to convey your views directly to Lloyd’s as well.

The LMA will continue to work tirelessly with the market and with Lloyd’s to reach an agreed vision for our future. Together we have advanced six transformational propositions to make Lloyd’s lean and efficient, even more innovative, easy to work with, and hyper-responsive to customer needs and emerging risk issues. It is now time to fill in the detail – and I am under no illusion that the process will be simple. Some of the proposals will fly, but others may not.

I am equally confident that we will get there in the end, and I am determined that by working together we will get it right. That makes it all the more essential that we hear your opinions about the biggest changes at Lloyd’s since R&R in the 1990s. Synthesizing opinion to reach consensus is a key part of the LMA’s role in this process. It is a rare opportunity for the LMA to enable the success of our members and the market. Let’s work together to define how change should look.


Published 23 July 2019

This article was previously published in the 2019 Spring/Summer edition of Viewpoint


Click here to download Viewpoint.


Sheila Cameron
Chief Executive

About this article

This is a transcript of the speech delivered by Sheila Cameron at the LMA's annual CEO lunch on 27  February 2019

Good afternoon everyone and welcome to the LMA’s annual CEO lunch.

This is my first lunch as CEO of the LMA and it was an honour to take over the reins from David Gittings at the beginning of this year.  

A large part of the reason I took on this role is because I am utterly passionate about the Lloyd’s marketplace.  The role of the LMA is to enable a Lloyd’s marketplace in which you, our members can succeed – fundamentally we are stronger together.  We seek to achieve this in many different ways – be that through the fantastic educational programmes run by our Academy or by the dozens of technical model wordings we issue each year or through our the behind the scenes lobbying work.  

One of the most important roles though is representing the needs and wants of the managing agent community into Lloyd’s.  As John Neal noted in his recent speech, the Lloyd’s marketplace should be “leading the flotilla for others to follow, not sailing in the wake of our peers trying to catch up”.  

At the LMA, we want to seize this leadership initiative with a focus on five key areas:
Firstly, we want to continue the necessary work started by Jon Hancock’s team on instilling disciplined underwriting across the market.  This work focuses on delivering a sustainable Lloyd’s marketplace for all of its participants and we are working with Jon to support him in this endeavour.

Secondly, we will push an agenda that seeks to drench our processes in technological solvent.  This does not mean coming up with a magical new all singing, all dancing, expensive system that makes your coffee in the morning and brushes your hair, but instead we will work with the market to use today’s technologies and investments to deliver incremental change to our manual processes, and turn them into digital ones.  

Thirdly, we are working with Lloyd’s on the future of the marketplace, and in particular exploring opportunities for differentiated lead/follow models and methods of enhancing the consortia model, which will ultimately benefit the end customer.  

Fourthly, Brexit is also very high on all of our agendas.  Led by our legal and compliance director, Kees van der Klugt, there has been enormous amounts of work around  ensuring continuity for clients - not just for newly incepting contracts but also for our ability to pay claims on legacy contracts in the event of a no-deal Brexit.

Fifthly and finally, we are working with both the LMG and Lloyd’s on bringing a customer lens to all that we do.  In an FT article a few weeks ago, our Chairman Andrew Brooks spoke about refocusing on the North American market.  We recognise that there is work to be done around resetting perceptions of the Lloyd’s marketplace, following on from the unfairly negative press headlines late last year.  This is an area in which we  will continue to work closely with Lloyd’s.  

These five priorities are all vitally important to ensuring we make the Lloyd’s market a better place for you, our members.  At the LMA, we achieve this goal through our people, all of whom are as committed and passionate about the Lloyd’s marketplace as I am.  

Finally, I would like to thank you all for being here today.  I truly believe that the Lloyd’s marketplace has turned the page and is setting itself up for success through a new unity of consensus.  Its confidence is returning and it is ready to once again lead the flotilla for others to follow.  It is the responsibility of the LMA and all of us here today as captains of the ships in that flotilla to seize this opportunity and to work together to ensure the Lloyd’s marketplace is around for another 300 years to come.

Thank you.