Lloyd’s has announced underwriting capacity for 2008 of £15.95 billion ($31.6 billion), underwritten by 75 syndicates managed by 46 managing agents. This represents a reduction of 0.9% from the 2007 opening capacity of £16.1 billion and signals a commitment to underwriting discipline in the face of a softening market.

Lloyd’s also announced that since the capacity figure “is unique to Lloyd’s and not directly comparable with terms used by other insurers,” the market would stop publishing capacity figures at the beginning of the year. Instead, Lloyd’s will release data in April on gross premium written in the previous year.

Lloyd’s capital base remains diverse, with no single capital provider providing more than 7% of the market’s total capacity. Lloyd’s achieved a combined ratio of 82.9% for 2007.

Lloyd’s is rated A (Excellent) by A.M. Best and A+ (Strong) by Standard & Poor’s and Fitch. See more about Lloyd’s ratings, capacity and capital base here.

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Patrick Small
Manging Director, Flood Group
Wells Fargo Special Risks

Patrick is the Managing Director of a newly formed flood and financial institution program practice group for Wells Fargo Special Risks, Inc. He is charged with product development and underwriting oversight on behalf of select capital partners.

Formerly with Aon Corporation, Patrick held a variety of positions responsible for production and management, with an emphasis in the commercial bank and mortgage banking industries. His background includes flood compliance, force placed/foreclosed property coverage and fidelity and mortgagee E&O experience.

Patrick frequently contributes editorial content to insurance and banking trade publications and was most recently featured in Secondary Market Executive (“An Unprecedented Loan Cycle Requires Extra Insurance Scrutiny” Sept 2006) and Scotsman Guide (“Heading for Higher Ground” March 2006).

Frank W. Strenk
Senior Vice President of Risk Management Services and
National Practice Leader, Enterprise Risk Management Practice
Lockton Companies

Frank has over 25 years of experience in the insurance industry and is responsible for the delivery of risk management services to Lockton clients, including loss and exposure analysis, risk strategy development, and risk financing program design and implementation.

Before joining Lockton, Frank was Senior Manager with Bearing Point (formerly KPMG Consulting), where he led consulting engagements in the firm’s insurance segment. Frank also spent time with a major insurance broker in the risk management consulting area, providing a wide array of analytical services, including the design and implementation various risk-financing strategies. He also co-led a risk strategy consulting practice for a major international consulting firm.

Frank holds a Bachelors degree in mathematics from Montclair State College and is an associate member of the Risk and Insurance Management Society and affiliate member of the Global Association of Risk Professionals. Frank has been guest speaker at various industry functions and is currently an instructor for the Risk and Insurance Management Society, focusing on alternative risk financing structures, especially captives.

See more about Frank's speaking engagements, publications and Enterprise Risk Management experience here.

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It's going to be another fun-tastic year for IA - Chicago's most dynamic group of insurance up-and-comers!

IA kicked off the new year with a gala luncheon at the Parthenon Restaurant. More than 80 people filled the back room of the Parthenon for cocktails, a delicious lunch, and a presentation on financial planning by Mike Foreman of Lincoln Financial. See photos from the lunch and afterparty here.

St. Baldrick's Foundation charity fundraiser

IA is fielding another team of head shavees for the St. Baldrick's Foundation fundraiser at Fado Irish Pub at 100 W. Grand in Chicago, on Friday, March 14, 2008.

St. Baldrick's began as a casual conversation between a couple of re-insurers who were looking to make a difference and has exploded into the world's biggest volunteer-driven fundraising program for childhood cancer. In eight years, events have taken place in 18 countries and 46 US states, raising over $34 million, and shaving more than 46,000 heads.

Last year the IA team raised almost $10,000 and this year they hope to go far beyond that. You can get more information about St. Baldrick's, sign up to be a shavee, or sponsor members of the IA team here.

More in store!

IA has more great events planned for 2008, including a spring Cubs game outing, a summer boat cruise, happy-hour networking and lunch-and-learn events, and much more. So join IA or renew your membership today!

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The Lloyd’s Market Reform Group has announced figures for the progress the market has made in process reform in Accounting and Settlement, Electronic Claims File and Contract Certainty, and set out goals for 2008.

The announcement stated that more than 80 Lloyd's brokers are using the Electronic Claims File, accounting for approximately 92% of claims by volume. Many brokers are reporting a reduction in settlement time and improved customer service.

Use of A&S has increased rapidly, with over 70% of original premium submissions being processed electronically. All firms will be required to submit original premiums electronically by the end of the first quarter of 2008, when paper service will cease.

Contract Certainty appears to be embedded as business as usual in the market and remains consistently above 90%.

"The Market Reform Group announcement clearly shows the progress that we have made towards making this market a more efficient place to do business," said Sue Langley, Lloyd's Director of Operations and North America. "In all three of the key workstreams - Accounting and Settlement (A&S), Electronic Claims Files (ECF) and Contract Certainty - the market has embraced new systems and shown a determination to change the way it does business."

In addition to complete take-up of A&S and ECF by the end of the first quarter of 2008, market reform goals for this year include a substantial increase in the market’s ability to exchange structured electronic data to support the insurance process, including e-placing for risks and endorsements. Applying ACORD data standards is central to this effort. Face-to-face negotiation on individual risks, supported by the electronic process, will remain a key part of market activity where it adds value.

In response to the announcement, Lloyd’s CEO Richard Ward said, “During the last year, the market has once again demonstrated that by working together we can achieve our goal of modernising the way we work and ensuring a better level of service for our customers. Against the backdrop of difficult circumstances I am delighted with the progress that has been made on ECF and A&S. This momentum must continue in 2008.”

See more at lloyds.com

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TRIA has been extended, with modifications, for seven years. Illinois Division of Insurance Bulletin CB2008-01 summarizes Illinois terrorism form requirements.

The following guidelines should be considered with your Illinois risks.

• Lloyd’s Illinois requires evidence of Lloyd's underwriters agreement to any new forms used as a result of the recent changes to TRIA.
• Terrorism forms used on licensed business must be filed with the IDOI and contain certain TRIA definitions and program triggers.
• The new LMA terrorism endorsements, recently published to the market, are not filed in Illinois since they do not conform to IDOI requirements. LMA forms can be used on surplus lines business with agreement from the Lloyd’s underwriter.
• Illinois is a standard fire policy state, so any terrorism exclusions for commercial property risks must contain an exception for fire following a terrorism loss.
• ISO has filed terrorism forms with the IDOI for standard lines of business (ie commercial property, inland marine and commercial general liability). We can assist you or your Lloyd’s broker to find ISO forms that are filed in Illinois.

You can see a quick and easy digest of Illinois terrorism form requirements here.
See the Illinois Division of Insurance bulletin on terrorism forms, rules and rates here.

Please contact our compliance team for more information.

Tom Oberwetter at +1 312 407 6204 or by email
John Dinges at +1 312 407 6210 or by email
Doug Heitzman at +1 312 407 6211 or by email

Illinois surplus lines procedures

We currently transmit PDFs of surplus lines policies that are accompanied by the Surplus Line Association of Illinois verification slip to SLA for processing - on a daily basis by secure FTP site. Please note that SLA will only process Lloyd's policies that have FIRST been countersigned by Lloyd's Illinois.

We are working with SLA to integrate our LIFT data system and the SLA E-file system. Before the end of the first quarter of 2008, we expect to be able to transmit data files of all Illinois surplus lines transactions directly to SLA. In order for us to do so, we will require that policies and endorsements that are submitted to us include the Illinois Surplus Line Association Member Number. See more information at slai.org

This new method should vastly improve the speed of processing Lloyd's surplus lines business in Illinois. The sender of the document will receive a countersigned PDF from us by email as soon as we have processed the document - and an email confirmation that the data has been forwarded to SLA. The Illinois surplus lines producer will then be able to log on to the SLA EFS to get an online confirmation of SLA processing.

Contact Elham Abdishi at +1 312 407 6205 or by email for more information.

So long, piles of paper! Lloyd's Illinois is nearly 100% digital!

As of January 1, 2008, Lloyd's Illinois receives, processes and transmits nearly 100% of our business electronically. Three years ago, we handled almost 100% of our work on paper - so we've come quite a long way in a very short time!

Much of the thanks for this sea-change must go to our market partners, who were quick to realize the advantages in terms of processing time and customer service that could be had, simply by switching from snail-mail to email.

Documents can be submitted to us by email at mail@lloydsillinois.com Contact us for information on our capabilities to recieve direct data feeds via secure FTP connection and our other small-bite tech solutions for handling your business.

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Wendy Baker departs Lloyd’s America

Wendy Baker resigned as president of Lloyd’s America at the end of 2007. In announcing her departure, Sue Langley, Lloyd’s Director of Market Operations and North America, said that Ms. Baker had played a significant role in developing Lloyd’s US presence since she took her position in 1998. Ms. Langley noted that during Ms. Baker’s time as president, premium “from the region has risen threefold, and our profile in the US market has increased significantly.”

Ms. Langley recalled that during Ms. Baker’s tenure, she steered Lloyd’s US operations through difficult times, including the aftermath of the September 11 terrorist attacks and the 2005 hurricane season.

She added that Ms. Baker “helped ensure that America recognized both the expertise and financial security of the Lloyd’s market. I would like to thank her for her hard work and dedication. She leaves with our thanks and best wishes for the future.”

Lloyd’s chairman, Lord Levene, called Ms. Baker “a true ambassador for Lloyd’s in the US over the last nine years. She will be sorely missed by both the UK and US markets, and the corporation in London.”

Ms. Baker said in a statement that, “despite some tumultuous and tragic events, I have enjoyed representing such a unique market of dedicated underwriters and brokers. It has been a privilege as well to work with such dedicated colleagues within Lloyd’s. I will miss them all. It has been fun.”

Maryanne Swaim promoted Senior Vice President, Lloyd’s North American Business Operations

Maryanne Swaim, President of Lloyd’s Illinois, has taken on the additional responsibility of overseeing all Lloyd’s operational and process platforms in North America.

North America accounts for roughly 40% of Lloyd’s worldwide business. Lloyd’s has international offices in Canada, Illinois, Kentucky, New York, the US Virgin Islands and the West Coast.

In the US, Lloyd's underwriters are licensed insurers in Illinois and Kentucky, and may also write surplus lines business in Illinois in certain circumstances. Illinois is the only region in the world where Lloyd's enjoys this dual platform.

Lloyd's writes the second largest amount of surplus lines business in the US of any insurer.

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Views expressed in this newsletter do not necessarily reflect the opinion of Lloyd's. While every effort has been made to ensure that the informationgiven is accurate, no responsibility (legal or otehrwise) is accepted by Lloyd's for any errors or omissions.

Copyright © 2008 Association of Lloyd's Brokers