Lloyd’s of London has announced plans to launch its own insurance based index in mid-2016. This would be the first index for diversified risk, showing loss ratios and focused on insurance performance.
It is intended that the detailed insight into the performance of the market will provide managing agents, brokers and other insurers with new options for managing risk and form the basis of index-related products of interest to the wider capital markets.
The Lloyd’s Index will show loss ratios – premiums versus claims – for the Lloyd’s market on an aggregated basis, and will focus entirely on insurance performance. Subscribers to the index, which is planned for quarterly publication, will be able to view data on a whole market basis. It is anticipated that additional indices defined by class of business will be available in due course.
“This is an exciting and innovative development for Lloyd’s," commented chairman John Nelson. "Our continued success is dependent on being able to develop the tools the market needs and also reflect the environment it is operating in. 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.”
Over the coming months, Lloyd’s will seek market input on the initiative as well as discussing appropriate governance measures with the UK regulators.
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