Finance, Actuarial and Exposure Management Update, Q3 2026
20th October 2026
Paul Davenport
Finance and Risk Director
Welcome to our latest report on key activities and developments within the Finance, Actuarial and Exposure Management areas relevant to the market arising in the third quarter of 2026.
The QMA Delta and Capital Provider Data workstreams were both completed in Q3. The LMA Capital Provider Data Requirements were communicated to the market on 06 October. These requirements are relevant only to managing agents with syndicates supported by third-party capital.
The results of the QMA Delta review and year-end preparations are scheduled to be discussed at a Lloyd’s market briefing on 22 October. The usual year-end instructions are due to be issued on 01 December.
The Finance Committee discussed with Lloyd’s Chief Financial Officer which areas of reporting should be considered next.
Potential areas included removing the XBRL audit-opinion requirement, progressing QMB rationalisation, consolidating tax reporting currently submitted in different formats, reducing capital focus-area returns and related interactions, and enabling reporting in US dollars across relevant returns.
Committee members supported a structured roadmap for change that maintains momentum while allowing the market time to embed the changes already introduced.
The LMA aims to facilitate roundtable discussions with CFOs before the end of the year to gather views on the next phases of reporting rationalisation and the proposed roadmap.
Capital data to members’ agents and third-party capital providers
As noted above, this workstream concluded and the requirements were published on 06 October. They establish a standardised set of information that can be provided to members’ agents and third-party capital providers. The requirements are designed to address the loss of consistency and comparability following the replacement of elements of the QMA process with tagged financial statements.
The requirements apply only to managing agents that manage syndicates supported by third-party capital. They are not intended to introduce new reporting obligations and are based on data already generated for Lloyd’s reporting, regulatory purposes or internal management.
Transitional options have been incorporated to accommodate different reporting capabilities and processes across managing agents. For questions, please contact Paul Davenport.
Lloyd’s charges and indirect costs
Lloyd’s issued its notification of charges and confirmed that rebates for 2026 would be calculated on the same basis as in the previous year. For 2027, however, the adjustment, whether upwards or downwards, will be based on the gross written premium (GWP) reported in the Q3 QMB.
The Finance Committee also discussed the indirect costs of operating at Lloyd’s. Members highlighted fragmented or repeated requests from different Lloyd’s teams, late or non-standard capital questions, and a lack of transparency around the calculation of STFO charges. The Committee is collating specific examples to raise with Lloyd’s. If you have examples to share, please contact the LMA.
Finance talent, skills and capability
Following the compilation of findings from the Finance Talent Survey, the Finance Committee established a subgroup to consider practical actions. It is examining three areas:
entry routes into Lloyd’s finance functions
training and development for people entering the market from adjacent sectors, such as wider financial services
more consistent descriptions of finance roles and expected skills at different levels of seniority.
The subgroup will liaise with relevant market bodies, such as LMG, to explore a finance-specific graduate or apprenticeship route. It will also review the existing LMA Syndicate Finance Academy to assess whether its content and delivery continue to meet market needs. Managing agents will be invited to share role descriptions, skills matrices and comparable internal frameworks. These will inform a consistent set of descriptions for finance roles, expected capabilities and potential career progression routes.
Tax Group
The Tax Group’s main focus during the summer was HMRC’s proposed mandatory foreign permanent-establishment exemption and its implications for Lloyd’s corporate members. When the proposals were first considered in June, members identified significant issues relating to Lloyd’s central tax arrangements, the information that would need to be provided to members, the treatment of overseas losses and existing double-tax-relief pools, and whether implementation from the 2027 accounting period would allow the market sufficient time to prepare. Lloyd’s subsequently raised these concerns with HM Treasury and HMRC, arguing that the mandatory exemption should not apply to Lloyd’s members given the market’s existing bespoke tax arrangements.
In September, Lloyd’s reported that HMRC recognised the Lloyd’s market as a special case, although the expectation remained that members would need to comply with the new rules. Lloyd’s continues to seek a Lloyd’s-specific exclusion. HM Treasury and HMRC have requested an assessment of the potential financial impact to support consideration of an exemption or transitional arrangements. In parallel, the Tax Group is developing practical simplification and transition proposals should the rules apply.
The Group also reviewed new OECD Pillar Two material issued in September, including a revised Global Information Return template and changes that may affect the treatment of certain US taxes and Bermuda arrangements from 2026. Members noted a potential risk of double taxation if particular US taxes or levies cease to qualify as covered taxes under Pillar Two. No immediate action was agreed. The 2025 filing position will continue to be monitored while the implications for 2026 and later periods are assessed.
Finance Next Generation Committee
The Finance Next Generation Committee discussed how managing agents are using AI in finance functions. Examples included data analysis, note-taking, proofreading, financial statement review, research, consistency checks, month-end processes and forecasting. Members also raised questions about controls, auditor expectations and the precision required when using financial terminology in AI-enabled tools.
The Committee will consider whether AI use cases should become a more focused workstream and how practical examples could be shared with the Finance Committee and the wider market.
Faster Claims Payments (FCP)
A prioritised list of managing agents using “Follow Provisional” arrangements that are holding back wider adoption has been identified. The LMA finance and claims teams will contact these managing agents to understand the remaining barriers to adoption.
Actuarial
The Committee of Actuaries in the Lloyd’s Market (CALM) launched a survey of members on AI use cases to help determine future priorities and opportunities. Further responses are needed to ensure a representative sample. Members who have not yet responded are encouraged to complete the survey.
The Committee monitored and responded to issues during the SBF/LCR preparation period, particularly Lloyd’s definition of “rate adequacy” for the purposes of SBF review and CPG discussions.
Working groups continued their work on the pilot of Partial Internal Models (PIMs), responses to softening market conditions and post-event recapitalisation processes.
Treasury and Investments Group (TIG)
The Asset Infrastructure Programme continues to make good progress. Tranche one integrations have been built and data onboarded, while work continues on tranche two. A direct feed from Clearwater has been dropped on cost grounds, meaning additional feeds directly from asset manager and custodian systems are needed to realise the programme’s benefits. Lloyd’s is holding regular drop-in sessions to address questions and issues.
The project remains on track for the Q3 QAD return to be the final return.
The Treasury and Investment Group is working with Lloyd’s to improve visibility of the availability of letters of credit, bank concentration limits and approved providers.
A separate Group session on treasury management and premium collection issues will be arranged. Please contact the LMA if you are interested in participating.
Exposure Management
The Exposure Management Working Group reviewed draft market guidance on catastrophe model validation practices. The guidance will be revised to focus more closely on market practice and is expected to be published in Q1 2027.
Research and the collection of information resources relating to data centre exposures were completed. The findings are due to be reviewed by the group in October.
Working groups on reporting simplification, casualty scenarios and AI use cases continued to make progress.
The minutes of all committee meetings are available below (member login required).
Risk, Sustainability and Climate Risk Update, Q3 2026
Paul Davenport
Finance and Risk Director
Welcome to our latest report on key activities and developments within the Risk, Sustainability and Climate Risk areas relevant to the market arising in the third quarter of 2026.
Risk
During Q3, the Chief Risk Officers (CRO) Committee discussed initial lessons from the PRA DyGIST exercise, Lloyd’s expectations on reserving risk ahead of capital submissions, developments in Lloyd’s risk and governance oversight and progress against the Committee’s 2026 priorities.
PRA DyGIST: Lloyd’s initial reflections
Lloyd’s shared its initial observations from the PRA DyGIST exercise. It noted that the Central Solvency Ratio following a major market event depends on assumptions about capital reloading and members coming into line. As these assumptions cannot be predicted with certainty at member level, it is difficult to update the ratio quickly and reliably during a major event. Lloyd’s will consider more practical ways to assess and communicate the market’s capital position as part of its post-exercise analysis.
The Committee also discussed assumptions around post-event recapitalisation. The exercise followed several profitable years, meaning existing surpluses could, to a large extent, be used to recapitalise syndicates and support post-event growth. Members noted that this might not be possible if a similar event occurred at a different point in the market cycle.
Members considered whether aligned capital could replace external capital unable to reload following an event and whether other arrangements, including temporary overwriting of capacity, could be used in specified circumstances. They emphasised the need for Lloyd’s to make pragmatic decisions quickly after a major event to support syndicates seeking to maintain or grow their market share. Lloyd’s confirmed that it would consider these matters in its post-exercise review. Members also asked whether Lloyd’s could share aggregate insights from the reinsurer concentration information collected through the exercise. A PRA briefing is scheduled for 23 November 2026.
Lloyd’s expectations ahead of capital submissions
Lloyd’s outlined areas receiving increased attention ahead of forthcoming capital submissions, including geopolitical risk scenarios for firms with significant exposures and the impact of market softening on loss ratio assumptions.
The Committee discussed the relationship between business plans, actuarial best estimates and capital models, including how best-estimate assumptions should inform management adjustments for planning, reserving and capital purposes. Lloyd’s reiterated that firms should be able to explain clearly any differences between the assumptions used in these processes.
Lloyd’s risk and governance oversight
The CRO Committee continued its engagement with Lloyd’s on Principle 10 and wider risk and governance oversight. Lloyd’s confirmed that no immediate changes were planned and that any future proposals would be discussed with market participants before implementation. An in-person market briefing was scheduled for 13 October to provide an overview of the Principle 10 oversight methodology and explain how Lloyd’s assesses Principle 10 across managing agents.
Members discussed the role previously played by the Principles-Based Oversight Working Group and supported re-establishing a forum through which managing agents could provide collective feedback on how the framework operates in practice and respond to any proposed changes.
CRO Committee: 2026 priorities update
Lloyd’s Emerging Risks: ORSA 2026
Representatives from Lloyd’s presented the results of work to aggregate emerging risk information from syndicate ORSAs. The aim is to identify market-wide themes, share aggregate insights with participants and support collaborative responses through initiatives such as Lloyd’s Lab and the Lloyd’s underwriting performance team. The emerging risk report is intended not only to identify risks but also to address the “so what” question by outlining market responses, Lloyd’s activities and potential solutions. Lloyd’s expects to publish the report later in October.
Risk function benchmarking survey
The market-wide risk function benchmarking survey, undertaken by the LMA in partnership with Teneo, has concluded, with more than 30 responses received. Thank you to all CROs who took the time to participate. The final analysis is being prepared and will provide insights into risk function structures, skills and capabilities, and interactions with other control and assurance functions.
The findings are due to be presented to the CRO Committee on 20 October. The Committee will then host an in-person event on 19 November, featuring a presentation of the findings, a panel discussion and networking drinks. Invitations were scheduled to be circulated in early October.
Risk practitioners’ guide to enhanced underwriting
Work has begun on a risk practitioners’ guide to enhanced underwriting. Developed in association with Artex, the guide will consider underwriting controls and the role of the second line in the context of enhanced underwriting propositions. It will draw on the LMA’s The Growth of Enhanced Underwriting in the Lloyd’s Market: The New Normal? report and previous LMA CRO work on underwriting controls.
CRO Committee members and other contributors will be invited to take part in interviews and discussions about current underwriting control frameworks and practices. If you would like to contribute to this phase, please contact Alex Koukoudis.
LMA-wide Risk Radar
The CRO Committee will support and oversee the development of the LMA’s first Risk Radar. This initiative will bring together themes emerging across LMA committees and working groups to provide an annual view of key risk priorities.
The first stage involves analysing activity across LMA committees to identify key risk themes, including those that cut across multiple areas. An initial analysis will be presented at the next CRO Committee meeting, where members will discuss the format before the final version is published later in the year.
Risk Next Generation Committee
The Risk Next Generation Committee presented its risk culture guidance to the CRO Committee in July. The guidance is intended to provide managing agents with a practical structure for assessing, evidencing and discussing risk culture. It includes a proposed definition of risk culture; four dimensions covering leadership, awareness and accountability, transparency and adaptiveness; guidance on responsibilities across organisations; a maturity framework; and examples of potential metrics and indicators.
The CRO Committee welcomed the guidance and supported wider circulation following final formatting and refinement. The LMA expects to publish it to the market in October.
Sustainability and Climate Risk
During Q3, the Climate Risk Working Group (CRWG) continued its work on the climate scenario analysis playbook project launched in June. Over the summer, the LMA and David Carlin held discussions with managing agents to understand how climate scenario analysis is currently used, the practical challenges firms face and how it informs governance and business decisions.
The final playbook will aim to help the market embed climate scenario analysis in risk management, underwriting, capital and governance processes. It will also include proposed transition and litigation scenario narratives to help managing agents initiate internal discussions and develop scenarios tailored to their exposures and circumstances.
These narratives will be refined following review by CRWG and Sustainability Committee members, with publication to the market expected by early November.
Lloyd’s climate scenario work
Lloyd’s provided the CRWG with an overview of its approach to climate scenario analysis. It has developed layered scenarios spanning three to five years and combining physical, transition and litigation risks to support internal risk management and its SS5/25 work. The scenarios follow a narrative structure and can be adapted as assumptions, climate science and exposures change.
Lloyd’s is due to receive PRA feedback on its SS5/25 gap analysis at the annual climate stocktake meeting scheduled for November. The LMA also plans to contact the PRA for further information on its timetable and proposed approach to oversight of SS5/25.
Sustainability Committee
Building on engagement with the LMA Chief Underwriting Officer Committee described in our Q2 update, the Sustainability Committee used its July and September meetings to consider practical outputs in areas identified as relevant to underwriting leaders. These include client transition plans, insurability and protection gaps, and the sustainability implications of data centres.
Client transition plans
The Committee discussed how client transition plans could serve as a source of risk-relevant information for underwriters. Members agreed that the immediate priority was not to assess the credibility of individual plans or classify them as good or bad. Instead, the Committee will consider how underwriters can identify and interpret information in these plans that is relevant to risk assessment and underwriting discussions.
The Committee agreed that previous work on sustainability data points should inform the transition-plan project rather than continue as a separate workstream.
AI, sustainability and data centres
The Committee discussed the sustainability risks and opportunities associated with data centres, including energy and water consumption and potential liability implications. It also noted that related work is already underway across other LMA teams and external initiatives, including the Sustainable Markets Initiative.
To avoid duplicating existing work, the Committee agreed to develop a concise paper outlining the sustainability-related risks and opportunities associated with data centres. The paper will be shared with the Chief Underwriting Officer Committee for feedback and to help identify where input from the Sustainability Committee would add value.
ClimateWise Insurability Readiness Matrix
Representatives from ClimateWise and the Cambridge Institute for Sustainability Leadership attended the September meeting to present the Insurability Readiness Matrix. The matrix is designed to help insurers and other stakeholders assess the factors influencing insurability for a particular asset, sector or geography, and identify actions and stakeholders that could help improve resilience.
Wider external engagement
The Committee reviewed work by the Sustainable Markets Initiative on data centres, carbon capture, utilisation and storage, sustainable buildings and other sector initiatives. Members agreed to draw on relevant external work to support the Committee’s priorities and avoid establishing parallel projects where useful work is already underway.
The Committee also agreed in principle that the LMA should explore wider publication of the Underwriting the Transition report, subject to confirming the position of contributors, KPMG and relevant Lloyd’s stakeholders.
The minutes of all committee meetings are available below (member login required):
An update from the LMA’s CEO, Sheila Cameron, to managing and members’ agent CEOs.
Sheila Cameron
Chief Executive Officer
Overview
Q3 was dominated by the situation in the Middle East, the Lloyd’s half year results, preparation for business planning and various geopolitical matters. Additionally, we gave a guarded welcome to upcoming proposed changes to conduct risk presented by the FCA. Please note the actions below under the Velonetic section in respect of signatures required on new contracts and the material outsource notification process. Updates on these matters are provided below.
Primary areas of market focus during Q3 2026
Half year results
A summary of the Lloyd’s market half year results is provided below and can also be found on Lloyd’s website.
2025 full year
2025 H1
2026 H1
GWP
£57.9bn
£32.5bn
£34.7bn
COR
87.6%
92.5%
90.8%
Underwriting result
£5.2bn
£1.5bn
£1.9bn
Investment result
£6.0bn
£3.2bn
£1.8bn
Profit before tax (excl FX)
£10.6bn
£4.2bn
£3.5bn
Attritional loss ratio
47.9%
48.3%
51.1%
Major claims ratio
5.8%
10.4%
6.8%
Expense ratio
35.6%
35.8%
36.4%
Admin cost ratio
9.5%
9.8%
10%
Acquisition cost ratio
26.1%
26.0%
26.4%
Prior year releases
(1.7%)
(2.0%)
(3.5%)
Premium growth
4.2%
6.2%
15.8%
Price movement
(3.7%)
(3.5%)
(6.7%)
Volume growth
10.3%
11.9%
6.9%
FX impact (%)
(2.4%)
(2.2%)
(2.2%)
Capital, reserves, sub loan
£49.8bn
£43.8bn
£48.4bn
Return on capital
22.0%
20.7%
21.6%
Central solvency ratio
496%
468%
503%
Market solvency ratio
200%
206%
199%
The major points to note from these results are:
increases in both the price decline (from (3.5%) last half year to (6.7%) at this half year – this was the largest rate reduction since 2015;
increase in the attritional loss ratio from 48.3% to 51.1% but a significant decrease in the major claims ratio from 10.4% to 6.8% (10-year average is 10.4%);
expense ratio increase driven by both acquisition and administrative costs increases;
premium growth being driven almost exclusively by volume growth (6.6% from new syndicates and 9.2% from existing syndicates);
increased weakening of USD against GBP.
At the launch of the half year results, Lloyd’s stated that it expects full year GWP to be £64bn (+/-5%), the full year combined ratio to be between 90-95% and a 3% investment result, all with the usual caveats.
Rachel Turk also presented on Lloyd’s view of both rate and technical adequacy, as outlined in the table below.
At the presentation, Rachel Turk spoke about expectations for 2027 plans, the last of which have just been filed with Lloyd’s. She said she expected firms to demonstrate a deep understanding of their portfolios, particularly in respect of exposure volatility and concentration awareness. She also expects firms to demonstrate that they are being realistic about rate adequacy, with credible assumptions for rates, claims and technical margins, and that firms are taking evidence-led action early.
Regulatory matters:
The FCA has just carried out a further consultation into simplification and applying proportionality to consumer rules. While we welcome the proposal to disapply granular rules with respect to international consumer business, a major win for the London market and something the LMA has long lobbied for, we pointed out that the piecemeal consultations and changes are increasing the cost of compliance. The FCA is also consulting on changing the rules allowing parties in the distribution chain to rely on others, which we have been asking for with respect to broker products. Unfortunately, this is not being extended to insurers. Finally, we objected to the part of the consultation which could potentially relieve the broker of the necessity to disclose their remuneration.
A summary of the positives and negatives of DyGIST was provided in this report last quarter. We await the final report from the PRA during Q4.
Geopolitical matters:
Persian Gulf: There have been few changes to the situation in the Persian Gulf this quarter. The LMA has continued to press the message that war insurance is available in Lloyd’s if required. Following the advice received from Counsel on legality of payment of tolls, we issued the LMA toll clause for use by underwriters and brokers clarifying that no insurance could be offered to vessels giving any form of consideration to the Iranian government. This was socialised with OFAC and the UK government and at numerous industry events.
We have also been lobbying with respect to governments continuing to respect international conventions preserving freedom of passage for vessels (UNCITRAL) and safety at sea (e.g. salvage services). The problems are well illustrated by the Caroline Bezengi, which has leaked 2,000 square kilometres of oil before salvors were able to start operations.
Five powers and cancellation provisions
The LMA has been running a project to consider whether changes are required to the five powers clauses used in marine and aviation which automatically cancel war contracts upon the outbreak of war between any two of the five powers. A working party has been considering how to progress this work following consultation with underwriters, brokers, reinsurers and discussions with the regulators. We obtained advice from lawyers in the main jurisdictions used by aviation and marine underwriters as to the effectiveness of automatic cancellation. The working group decided that the work on these clauses should be broken into two parts:
A clause which would detail matters that are and (perhaps more importantly) are not war for the purposes of triggering automatic cancellation; and
A methodology to assess whether the clauses are triggered.
Richard Waller KC has been instructed to assist us with this. He has also been asked to consider changes to the notice of cancellation provisions following the concerns that these raised in terms of publicity suggesting that war cover had all been cancelled upon the outbreak of war in the Strait, rather than the reality of such clauses usually being a precursor to re-instatement. Finally, he is considering whether clauses should be amended to achieve greater contract certainty in light of the application of the grip of the peril to detention circumstances.
Lastly, in the aviation market, there has been discussion with brokers around changes to risk arising in a war and the concept of “materiality”.
Velonetic contracts
The contract of services for Velonetic is being renewed and updated from FERN 2 to the Central Processing Subscription Agreement (CPSA, also known as FERN 3). The updated contract includes provisions for operational resilience and AI, as well as combining the two existing agreements into a single contract. A full briefing and supporting documentation including the Material Outsource Notification (MON) and the CPSA, are available on the LMA website. Multiple LMA and other market groups have been involved in the process to date and external legal advice has been provided by Clifford Chance.
Summary communications have been sent to COOs, regulatory committees, legal committees and multiple briefing sessions have been held, but should any further information be required, please contact Joe Brace (Operations Director) or Ray Koh (Legal Counsel).
The actions required by your firms now are:
October 2026 – review documentation and raise queries for the MON and CPSA.
By November 2026, the SMF24 needs to opt in to the collective MON – this is at managing agent level not legal entity level and will be used to demonstrate to the PRA that Lloyd’s has authority to submit the collective MON. This will be co-ordinated by the LMA and Lloyd’s.
Mid November – Lloyd’s will submit the formal collective MON, which is expected to take approximately six weeks to reach a state of “no more questions” (approval).
Q1 2027 – your company will need to sign the CPSA at a legal entity level. This will be co-ordinated by Velonetic. Depending on the individual managing agent’s governance arrangements, this may include consideration by the executive committee, risk committee and/or board.
Cultural and training materials
After 12 years, the final Dive In Festival for took place in September. Lloyd’s is proposing to transform the Dive In programme from a primarily inclusion-focused annual event into a broader, year-round talent and future skills initiative. Lloyd’s envisages a role centred on convening, enabling and co-ordinating market activity, supported by data, benchmarking and learning platforms, rather than
directly delivering programmes itself. The market was invited to provide feedback on the proposals and will be invited to participate to understand more about the new initiatives in early 2027.
In July, the London Market Group (LMG) hosted its second Lime Street Festival, welcoming 435 students to explore careers in insurance. Supported by 44 market organisations, the event offered students direct access to employers through CV reviews, fireside chats and networking opportunities. Registration is now open for the Lloyd’s Mentoring Programme, with opportunities for both mentors and mentees across the Lloyd’s and London insurance market. Further information is available here on the Lloyd’s website.
Notable people changes at Lloyd’s, FCA, PRA and the LMA:
Domini Bucknell-Sargent, Head of Market Oversight Management at Lloyd’s, is currently on maternity leave. During this period, Helen Rickards has moved from her role as Head of Culture Oversight to cover Market Oversight. Victoria Talbot will lead Culture Oversight on an interim basis.
Mark Lomas, Head of Culture, Lloyd’s left at the end of September. Lloyd’s is currently undergoing a search for their successor.
Looking forward to Q4 2026 areas of focus
2027 business planning season.
Publication of LMA member engagement survey findings.
Continued market response to geopolitical matters.
Definition of war triggers (five powers) and consideration of marine war notice of cancellation provisions.
Work on proximate cause in the context of requested changes to exclusion clauses in particular relating to cyber.
Lobbying with respect to misalignment of sanctions in the UK/US and EU, and in particular with respect to the challenge to the marine market from the UK LNG sanctions being stricter than other jurisdictions.
Working with Lloyd’s on the implementation planning of its strategy.
LMA’s project to digitise wordings.
Launch of new computable binding authority agreement model wordings.
Contractual discussions with Velonetic around renewal of the existing service contract and consideration of material outsourcing.
Lloyd’s Market Policies and Practices data collection will launch on 14 December and run until 29 January 2027.
16 LMA Academy programmes are scheduled for Q4, including AI & Automation Essentials, Business Interruption Contract Wordings, Commercial Acumen for Underwriters, Corporate Financial Statements for Underwriters, Cyber Incident Tabletop, Data Essentials, Data Visualisation with Python, Insurance Financial Statements for IFRS 17 Reporting, Introduction to Delegated Authority, Introduction to Python, Introduction to the Insurance Market Cycle, Regulation Essentials, Syndicate Accounting for Finance Professionals new to Lloyd’s, Underwriting Essentials, Working in the Lloyd’s Market Essentials and Working in the Lloyd’s Market for Professionals.
Key areas of focus across LMA committees and forums that took place during Q3 2026
Committee
Areas of focus during Q1 2026
Underwriting (Matthew Bellamy)
– The CUO Committee has also published advice on the Governing Law Paramount Clause. The clause has implications for narrowing exclusionary language to direct causes only.
– The CUO Committee has continued its focus on data centres, particularly with regards to aggregation and exposure management. Three expert presentations are taking place in September/October and further work is anticipated, including a model pre-risk survey of the market.
– The Wordings Committee has developed a model definition of AI systems, and accompanying guidance note, for general use in clauses granting coverage/applying exclusions in respect of AI risks. AI remains a hot topic in several committees and a project to produce a suite of AI-specific model clauses for use on professional indemnity risks will commence shortly.
– A number of committees are reviewing war exposures. The Terrorism & Political Violence Committee is considering producing a Warlike Operations definition for use on sabotage and terrorism coverage, and the Personal Accident Committee has recently reviewed model clauses addressing passive war risks.
– Several of the energy committees are working on new wordings and clauses in relation to economic limits, obsolescence, business interruption volatility, fixed costs and debt servicing. The Mining Committee has been working on new clauses for heap leach and tailings.
Events: – The LMA hosted a summer social event for the Non-Marine Committee on 09 July.
– An LMA briefing was held on 10 September on financial institutions professional indemnity cyber clauses, including a panel discussion with Jenny Boldon (Kennedys LLP).
– The LMA held its first ever quantum computing cyber conference attended by over 120 members and guests on 08 July. North American Casualty panel arranged a briefing from experts on the workers’ compensation catastrophe sector. The LMA hosted its first event on behalf of the Transactional Liability Interest Group on 29 September; a discussion on claims issues with an expert panel.
– The LMA is attending an energy event being held at the British Embassy in Warsaw with underwriters from the Lloyd’s market.
– The LMA Underwriting team had meetings in Paris (with colleagues from Legal & Regulatory) with French associations and government about cyber risk.
– The team is also speaking at BIBA’s regional conferences about a new model cyber wording for small and medium sized businesses.
Wordings: The LMA has published 50 new model wordings in 2026 so far, with nine wordings added in Q3. These include a property treaty loss occurrence clause update, Strait of Hormuz Transit Fee Condition, two employers’ liability/workers’ compensation updates, TRIA 2027 endorsement and a plastic product(s) exclusion for US general liability. We have also published a further two complaints protocols as RDW clauses on behalf of the Corporation of Lloyd’s.
Finance – We concluded the market engagement on Lloyd’s reporting rationalisation work for capital provider data and QMA delta outcomes (see below).
– We monitored the effectiveness of changes made to the CPG process and where necessary raised concerns regarding duplicated Lloyd’s information requests and the effectiveness of the Market Oversight Manager role. We will conduct a survey post-CPG to clarify any refinements needed.
– We developed proposals following the finance talent and recruitment survey, including review of the syndicate finance courses provided through the Academy, role frameworks and career pathways.
– Concerns around Lloyd’s direct charges were raised and the method of adjustment for rebates clarified for 2026 and 2027 (see Lloyd’s latest market charges bulletin).
– We continue to follow up and monitor adoption of the FCP Vitesse solution for loss funds by seeking to move managing agents from ‘follow provisional’ status to ‘follow advanced’ and identify any persistent blockers to adoption.
Reporting Project – The capital provider data definition was finalised and will be communicated to the market on 06 October. This is only relevant for managing agents with syndicates supported by third party capital.
– The review of QMA delta forms concluded and it was agreed with Lloyd’s to keep the reporting requirements largely stable for 2026 year end as the benefits of change are not outweighed by the costs involved for the market.
– We have continued to work with Lloyd’s to remove the requirement for an audit opinion on the financial statement tagging. A market briefing on QMA delta, 2026 year end and the roadmap for future reporting changes will be held on 22 October.
Treasury and Investments (TIG) – The LMA supported the rollout of the TS2 phase of the Lloyd’s asset infrastructure transformation and migration towards Aladdin-based investment reporting. This is expected to complete before the end of the year with the Q3 QAD being the final time that that is submitted.
– We are working with Lloyd’s to provide better visibility of the availability of letters of credit, bank concentration limits and transparency of approved providers.
– Lloyd’s has been asked to clarify the treatment of illiquid assets within capital frameworks for the market.
– A separate Treasury and Investment Group session on treasury management and premium collection issues will be held in Q4.
Actuarial – We launched a survey of the committee members on AI use cases to determine likely future direction and opportunities.
– The Finance Committee raised concerns regarding the burden and usefulness of the Actuarial Function Report and explored opportunities for simplification.
– We monitored and responded to issues as they arose in the SBF/LCR preparation period, particularly how Lloyd’s was defining “rate adequacy” for the purpose of SBF review and CPG discussions.
– Working groups continued on the pilot of Partial Internal Models (PIMs), softening market conditions responses and post-event recapitalisation processes. Exposure Management – The group reviewed a draft guidance document for the market on cat model validation practices. It is to be revised and edited to focus particularly on market practice.
– Research and gathering of information resources relevant to data centre exposures was completed and is to be reviewed by the group on 06 October.
– Working groups on reporting simplification, casualty scenarios and AI use cases have continued to make progress.
Risk – The Chief Risk Officers (CRO) Committee received an initial debrief from Lloyd’s on the lessons emerging from DyGIST. Discussions highlighted challenges around the practical assessment of Lloyd’s capital position following a major market loss event, the assumptions underpinning recapitalisation and capital reloading.
– Ahead of the next round of capital submissions, Lloyd’s highlighted increased focus on geopolitical risk scenarios, the implications of a softening market on loss ratio assumptions and the need for firms to clearly articulate any differences between business plans, actuarial best estimates and capital model assumptions.
– The committee received an update from Lloyd’s Emerging Risks team on work to aggregate and analyse emerging risk themes from syndicate ORSAs.
– The results of the risk function benchmarking and talent survey, run by Teneo, have been compiled into a report entitled “Risk Manager of the Future” which will be published in Q4.
– The LMA is developing an LMA-wide “Risk Radar”. The initiative seeks to bring together themes emerging across the LMA’s committees, panels and working groups to identify areas of concern and provide a recurring market view of risk priorities.
– The Risk Next Generation Committee presented its risk culture framework to the CRO Committee – this guidance will be published during Q4.
Sustainability and Climate Risk Working Group (CRWG) – During Q3, the Sustainability Committee strengthened engagement with the underwriting community through the Chief Underwriting Officer Committee (CUOC), focusing its programme on the topics most relevant to underwriting leadership. Key priorities included transition plans, insurability and protection gaps, and sustainability-related data.
– A major area of work was helping underwriters derive greater value from client transition plans, alongside examining the sustainability implications of data centres, including energy consumption, water usage and liability considerations.
– ClimateWise presented its Insurability Readiness Matrix and discussed how the framework could support underwriters around resilience, adaptation and long-term insurability.
– The Climate Risk Working Group is progressing a piece of work with David Carlin on practical guidance to support implementation of PRA SS5/25 and make climate scenario analysis useful for decision-making.
– The Working Group also received updates on Lloyd’s own climate scenario development and explored the role of climate reverse stress testing. Discussions highlighted the value of flexible, narrative-based scenarios that can evolve with changing technology, policy and geopolitical developments, while recognising that climate risks are generally most relevant when assessed alongside broader business stresses rather than in isolation.
Claims (Janine Powell)
LMACC Strategy: The LMA Claims Committee’s (LMACC) three-year strategy is nearing completion and is expected to be published in the coming weeks. Its priorities are claims promotion, talent, data and AI, and market engagement.
9/11: Janine Powell facilitated a discussion with five individuals who shared personal experiences of 9/11, including escape from the World Trade Center, personal loss, the industry’s immediate response, and the collaboration between insurers, brokers, experts and insureds that helped support recovery in the aftermath of the attacks.
FCP: Rachel Turk, has written to CEOs, CFOs and CCOs outlining the business benefits of FCP as the preferred funding and payment solution for delegated authority claims. While it will not be mandated, Lloyd’s expects it to become the default approach from 01 January 2027. The LMA Finance and Claims Committees have recommended engaging with approximately 30 firms that are not actively using FCP to better understand adoption barriers.
Delegated Claims Administrators: The LMA and LIMOSS are progressing plans for a centralised solution to streamline compliance and oversight of delegated claims administrators. A project overview is available on request and volunteers are welcome to join the working group. Market support for the initiative will be reassessed once indicative costs are known. The selected solution is also expected to support coverholder onboarding and ongoing compliance oversight.
Middle East: The LMA Complex Claims Group continues to coordinate the market response to the situation in the Middle East, with strong support from the Political Violence & Terrorism, Political Risk, Cyber, Marine, Property and Energy claims communities.
Various claim group updates: – Property Insurance Claims Group hosted a workshop on expert management, focusing on improving customer outcomes, case handling and cost control through the effective selection and management of experts.
– The Financial Lines and Cyber Claims Groups co-hosted a podcast exploring the growing intersection between cyber incidents and D&O exposures, highlighting the challenges and complex decisions that arise when policy coverages overlap.
– The Political Risks Claims Group hosted a charity quiz and networking event in support of the Nick Kilhams Foundation, attended by more than 100 market participants.
– In collaboration with the LMA, IUA and LIIBA, the Emerging Professionals Claims Group will host the first London Market Emerging Professionals Claims Conference on 26 October 2026.
– The LMA Third Party and Property claims groups opened applications for their respective educational programmes in Singapore and Australia, scheduled for March 2027.
Legal & Regulatory (Arabella Ramage)
Legal Gulf Conflict: In addition to the geopolitical update above, we have responded to numerous questions from regulators, the press and made presentations on the operation of notice of cancellation provisions.
In collaboration with Lloyd’s, brokers and P&I Clubs, the LMA produced evidence to the UK government on the potential impact of misalignment of sanctions with respect to carriage of Russian LNG cargos.
The LMA continues to collaborate with Lloyd’s regarding changes to sanctions and licensing, with the goal of minimal divergence between US, UK and EU sanctions.
Governing Law Paramount Clause: The team reviewed concerns about the potential wider use of a broker-generated paramount clause that could restrict the operation of exclusions by limiting their application to direct causes. Further external legal advice was commissioned to assess the clause’s effect, including its potential implications for war, nuclear, pandemic and cyber exclusions, aggregation and reinsurance protection.
LIC Managing Agency Outsourcing Agreement: Following review by the Legal Committee, NextGen Legal Committee, Regulatory Committee and member legal and compliance contacts, the team supported finalisation of the revised agreement. The revision addressed matters such as DORA and AI which were raised as issues by the National Bank of Belgium.
Litigation funding and collective actions: The team responded to consultations concerning third-party litigation funding and opt-out collective actions, including work from the Solicitors Regulation Authority and Department for Business, Innovation, Science and Trade. The LMA supported stronger consumer protection and effective oversight of litigation funding, while continuing to advocate wider reform addressing funder regulation, conflicts, transparency, and the disproportionate costs and risks generated by collective proceedings.
Wordings and market projects: Legal support was provided across a range of wording projects, including the TRIA contingency endorsement, and Brazilian reinsurance clauses. Work was also commenced to update the market DCA agreement.
Lawyers’ Forum and Legal Committee: The Lawyers’ Forum heard from HFW on operational resilience and the requirements, and from Dechert on the use of foreign judgments in winding-up and bankruptcy proceedings following the UK decision of Drelle. The Legal Committee received presentations on Lloyd’s multinational proposition, delegated authority and sub-delegation, continuous contracts and the CPSA. The team also delivered a market session in the Old Library on US law and arbitration, presented by Chris Paparella of Steptoe.
Emerging Litigation Forum: September’s forum was focused on Australia and Sparke Helmore the recent developments in class actions from PFAS and medical malpractice-related claims.
Legal talent: The team continued the Legal Trainee Wordings Scheme and onboarded two new legal trainees in September.
Regulatory Simplification of insurance rules and consumer duty: As set out above, the team provided substantive responses to the FCA’s dual consultations on rule simplification. The LMA worked together with the IUA and LIIBA to develop a market view. The responses can be found on our website.
FCA: The LMA met with the FCA’s new senior leadership for insurance policy and supervision. This was an important first discussion on our priorities and delivering on proportional oversight of the Lloyd’s market.
PRA/FCA captive regime: We have been involved in roundtables discussing implementation of the new rules to institute a regulation light regime for captive insurers. We have been encouraging speed of response and proportionality from the regulators. We are finalising responses to the regulators’ consultations.
Cyber: We have been inputting to the FCA’s project to encourage take-up of cyber insurance to try to reduce the insurance gap, particularly at the SME level.
Incident and Third-Party Reporting Workstream: Alex Sheahan has led two workstreams to develop guidance for members on the recent regulatory policy change. This has been supported by members from across regulatory and operations. We hope to publish this mid-Q4 following discussions with the FCA.
Compliance Officers Group: The session featured an update from the FCA policy team on its consultation to simplify insurance regulation, followed by a discussion led by Will Reddie and Bob Haken of HFW who went through the new expectations of the FCA and PRA on incident and material third-party reporting.
Value Measures Working Group: The team have attended roundtables hosted by the FCA to discuss proposed changes to value measures reporting. A key lobbying position for the LMA is delivering proportionality of this reporting.
Regulatory Committee: – International Programmes: The team reviewed proposals by Lloyd’s to implement a new solution for writing international programmes using a specific syndicate. The Committee will continue to consider these proposals and feedback to Lloyd’s as appropriate. – EIOPA, simplification and proportionality agenda: John Levett and members of the Regulatory Committee supported LIC in discussions with EIOPA to potentially replicate some of the changes implemented by the FCA. – Australia Royal Commission: The LMA engaged with the Insurance Council of Australia on a bilateral basis to discuss strategy for this inquiry into the insurance market in Australia. The LMA, following input from the Regulatory Committee, assisted Lloyd’s in preparing for giving evidence to the Australian parliamentary committee on insurance. – Other International: – Brazil: The team continues to support the market on applying the new reinsurance rules. The new clause suite is available from the LWR. – Libya: The LMA continues to work closely with Lloyd’s LITA team. We are working with broker partners to highlight issues arising from new rules in Libya impacting reinsurance business. – Financial crime workstream: Through the Financial Crime Workstream, the team set up a working group which will look at lead-and-follow sanctions responsibilities in lineslips. The Financial Crime Workstream also considered Venezuela licensing, Iranian aviation restrictions, emerging Israel-related trade measures and divergence between UK and EU treatment of Russian LNG. The group also considered lessons from OFSI’s enforcement action against Citi.
Consultations: We reviewed 46 consultations and made substantive responses to the following eight, all of which are available on our website: – Misuse of Non-Disclosure Agreements – FCA CP26/22 – Simplifying Insurance Rules – FCA CP26/23 – Consumer Duty Scope and Proportionality – Call for Input – UK Trade Relations & CPTPP – NAIC Privacy Protections Working Group – PRA Low Impact Amendments – Removing Syndicates from Internal Model Output Reporting – SRA – Third Party Litigation Funding – DBT – Competition & Regulatory Appeals Process
HR, Culture & LMA Academy (Fiona Temple)
– The LMA concluded the discussions with HRDs and Heads of Talent on the future of the Dive In festival and circulated updates from Lloyd’s.
– We issued a survey to HRDs on what member firms were telling their employees during the hot weather. The results were: – The majority of organisations (52%) did not advise employees to avoid travel into London during periods of extreme heat, while 22% handle such decisions on a case-by-case basis and only 17% are actively advising against travel. – When guidance was provided, “Employee choice” was the most common approach (53%), followed by “Manager discretion” (26%) and “Avoid non-essential travel” (21%). Hybrid working at employee discretion was the most encouraged adjustment (63%), with some also allowing flexible hours (11%) or other arrangements (21%). – Most organisations (67%) were not advising teams to move in-person meetings to virtual, but 33% made the decision on a case-by-case basis, indicating a flexible approach to meeting formats during extreme heat.
– 48 firms took part in the LMA bi-annual benchmarking survey of HR policies and practices with results delivered to participating firms in September.
– In conjunction with the LMA Legal team, HRDs were invited and we responded to the Department for Business and Trade’s consultation on the new rules to restrict the use of non-disclosure agreements (NDAs) in cases of workplace harassment and discrimination, building on reforms in the Employment Rights Act 2025. The proposals would void NDAs that prevent workers speaking about misconduct, while allowing limited exceptions where strict conditions (e.g. independent advice and worker consent) are met. The aim is to prevent the misuse of confidentiality clauses to silence workers, improve transparency and strengthen workplace protections across the UK.
– The LMA Academy delivered 15 events during Q3 with 285 delegates. Key events conducted included AI and Automation Essentials, Commercial Acumen for Underwriters, Data Essentials, Insurance Financial Statements for GAAP Reporting, Introduction to Fine Art & Specie, three x Introduction to Lloyd’s and London Insurance Marketplace, two x Introduction to the Insurance Market Cycle, Introduction to the Lloyd’s and London Insurance Marketplace, Legal Essentials for Early Talent: A Starter Guide for Non-Lawyers, Liability Contract Wordings and Understanding the Board of a Lloyd’s Managing Agent.
– During July, the biennial Conducting Business in the US programme took place in Chicago in conjunction with the Katie School of Insurance and Risk Management. It is next scheduled to run in 2028.
– Several multi-module programmes launched in September which will continue to run throughout Q4, including Claims Essentials, Claims Management, Cyber Insurance, Early Talent Kickstarter and INED Programme.
Operations & Delegated Authority (Joe Brace)
CPSA: See details above regarding the Central Processing Subscription Agreement (CPSA/also known as FERN 3). Details also available on our website.
LMG’s Data Council: An event was held on 24 June looking at data standards across the Lloyd’s, London and international markets in conjunction with Ruschlikon and ACORD. Joe Brace (Operations Director, LMA) also took over as Chair of the Data Council with effect from September 2026.
Core Data Record (CDR): Version 3.5 has now been published and includes delegated authority and claims CDRs on the LIMOSS Market Business Glossary (MBG). This marks the final CDR major release. The incremental CDR stages have also been tagged in line with ACORD standards. These are: initial stage (up to 15 data items); submission stage (up to 32 data items); quote request stage (up to 64 data items); quote stage (up to 91 data items); and bind stage (up to 232 data items). The CDR will be maintained and updated via the CDR committee administered by LIMOSS. For any further information, contact Joe Brace or James Bobbitt (Managing Director, LIMOSS).
Operational resilience testing: The Market-Wide Scenario Exercise (MWSE) is planned for the 11-12 November 2026. Briefing packs have been issued. For further information, contact Lloyd’s or Matt Wood (Head of Technology, Security and Resilience, LMA).
Urgent Settlement Framework (USF): This will be tested alongside the MWSE for 2026. The current scope of the published USF covers an outage of 10 days which reflects the time to recover the Lloyd’s Central Settlement (STFO) services.
Blueprint Two: There are two main workstreams that remain in place, Heritage Resilience and Heritage Plus. Heritage Resilience is, rightly, focused on operational resilience and we are monitoring work with Velonetic closely to ensure we remain operationally resilient in a post-Blueprint Two environment. Heritage Plus focuses on modernisation and we are waiting for further definition from Velonetic.
Third-party risk management: This is to provide a central due diligence service for market members to use for shared vendors – the questionnaires will be standard and documents collected will be stored once, so that they can then be used multiple times. The business case is with the LMAOC for review and vendor responses are providing a positive commercial case.
Computable Binding Authority Agreement (CBAA): The CBAA model wordings are now available on LMA Dare | Home. This is the culmination of a lot of market-focused work and a real win to update some very outdated wordings and ensure we are future proofing. Build of the ‘Wording Objects Library’ (WOL) is underway as an extension of the LIMOSS Market Business Glossary (MBG). The WOL will store the wording in its digital form and allow contract builders to consume the content via API. WOL go-live is targeted for 2027 and engagement with contract builders is well underway.
Delegated Authorities Streamlined Compliance (DASC): Linked to Delegated Claims Administrators use cases. We continue to collaborate with users, subject matter experts and Lloyd’s to ensure the question sets are appropriate for the use cases across the market, and we have engaged an independent consultant to ensure we can finalise an acceptable question set for all. The results so far are positive, but this will require market support for adoption.
Welcome to the Q3 update, highlighting key activities and developments within the operations areas relevant to our market.
Summer flies by and I hope you all had a chance to grab a break and reset.
The key focus at the moment is the Velonetic central contracts – please do take a moment to familiarise yourself and ensure your teams are engaged, as this critical contract underpins the central processing of all of our collective messaging and money movements. For an idea of scale, you can refer to Velonetic’s published stats.
I hope the update below reflects areas you are interested in, provides useful information to help fill in some gaps, prompts follow-ups, and reminds us that many of the challenges and opportunities are shared. If there is something you would like to see covered, please do reach out to me at joe.brace@lmalloyds.com.
Velonetic – Central Processing Subscription Agreement (CPSA also known as FERN 3)
The contract of services for Velonetic is being renewed and updated from FERN 2 to the CPSA (FERN 3). The updated contract includes provisions for Operational Resilience and AI and combines the two existing agreements into a single contract. A full briefing and supporting documents are available on the LMA website: Beginner’s Guide to FERN 3: Velonetic’s Central Processing Subscription Agreement.
Multiple parties have been involved in the process to date, including:
LMA Board
LMA Operations Committee including a customer panel for review
IUA, LIIBA, Lloyd’s and Velonetic
External legal advice via Clifford Chance.
A Senior Management Function for the Chief Operations Officer (SMF24) briefing note was shared with the market in July 2026 and is also included within the briefing linked above.
The CPSA contract was released on 30 September 2026, as well as the MON. These are available on Velonetic’s Knowledge Repository (KR). If you are not registered or are experiencing any technical or access issues, contact veloneticknowledgerep@dxc.com.
Summary communications have been sent to COOs, regulatory committees and legal committees. Multiple briefing sessions have also been held, but should you require any further information, contact me or Ray Koh (Legal Counsel).
The actions required by your organisations now are:
October 2026 – Review documentation and raise queries for the MON and CPSA.
By November 2026, SMF24 needs to opt in to the collective MON – this is at managing agent level, not legal entity level and is to demonstrate to the PRA that Lloyd’s has authority to submit the collective MON. This will be co-ordinated by the LMA and Lloyd’s.
Mid-November – Lloyd’s will submit the formal collective MON, which is expected to take approximately six weeks to reach a state of “no more questions” (approval).
Q1 2027 – Your organisation will need to sign the CPSA at legal entity level. This will be co-ordinated by Velonetic. Depending on the individual managing agent’s governance arrangements, this may include consideration by the executive committee, risk committee and/or board.
The LMG’s Data Council – data standards and more
I’ve taken over as chair of the Data Council with effect from September and will be building on the great work, led by Sheila, over the last few years.
We continue to work with the wider community, including the IUA, LIIBA, LMG, brokers, carriers, vendors, Lloyd’s, ACORD and subject matter experts, which will ensure a market-wide view. I’m really pleased to share that we published the final two Core Data Records (CDRs), covering delegated authority and claims, on 01 October (version 3.5, if you’re keeping track). These are all available on LIMOSS’ Market Business Glossary (MBG).
There is also a pre-bind bonus: tagging for the incremental CDRs, showing the maximum number of required data items at each stage of the ACORD standard placing process:
Initial (15* data items) – Categorises the contract type, creates a single reference for multi-party ingestion and tracking, and supports early sanctions identification.
Submission (32* data items) – Expands policyholder information, sets currency, limits and deductibles, and highlights the regulatory location for compliance.
Quote request (64* data items) – Provides full details of addresses and the nature of the insurable interest.
Quote (91* data items) – Adds premium details, claims agreement information and expanded classification data.
Bind (232* max possible data items) – Adds brokerage information, tax and fees, SoVs**, exposure measures and any remaining detail.
*Maximum data items **Schedule of Values (SoV) if required
Data standards are the enabling services we collectively need to adopt to help simplify how we share our data and process business from enquiry to claims payment. We have provided resources to help with case studies for data sharing on the LMG website.
The “coalition of the willing” continues to collaborate and the event held in July helped share some practicalities for data and messaging use cases underpinned by standards – the full write-up is available here.
Broker performance MI dashboard – aged debt empowerment
The Broker MI Dashboard Service, developed with Velonetic, was launched in February. Adoption is going well, but please do look at this service to help your premium collection from brokers. The tier 1 service is available to all managing agents, with a tier 2 service available for those who want more detailed data. Further information is available at velonetic.co.uk/broker-dashboard.
Market-Wide Scenario Exercise and Urgent Settlement Framework
The Market-Wide Scenario Exercise (MWSE) is planned for 11 – 12 November 2026. Briefing packs have been issued.
The Urgent Settlement Framework (USF) will be tested alongside the MWSE for 2026. The current scope of the published USF covers an outage of 10 days which reflects the time to recover Lloyd’s Central Settlement (STFO) services.
There are several change activities underway in the DA space, including:
Computable Binding Authority Agreement (CBAA) The wordings have been refreshed, no small task. In line with DARE, the intention is to enable the wordings and rules to be shared via an information model and set of APIs, leveraging existing contract-building partners. It’s an ambitious project with high complexity and high value.
CBAA model wordings are now available on lmadare.co for a period of market familiarisation.
External legal review of the model wording by Andrew Schutte from Keoghs commenced in mid-July, with the intention of joint instruction by a consortium of London market associations.
The Wording Objects Library (WOL) design was approved in early June and build is now underway as part of LIMOSS’ Market Business Glossary (MBG).
Contract Builder engagement is underway and we have shared the WOL API with them for feedback.
Delegated Authority Streamlined Compliance (DASC) including delegated claims administrators (DCAs)
We continue to work with users, subject matter experts and Lloyd’s to ensure the question sets are appropriate for the use cases across the market. For more details, contact Matt Wood.
Third-Party Risk Management (TPRM)
We are aiming to support centralised due diligence with standardised question sets and document collection on the basis of ‘ask once, share to many’. This will not replace the need to evaluate the due diligence based on your own risk appetite, but it will allow vendors and market participants a one-stop shop for TPRM. With the PRA’s PS7/26 on the horizon for March 2027 as well, this should be a helpful addition to our LIMOSS market services (elective).
This will also provide a good overview of concentration risks at the aggregated level.
The preferred vendor has been selected and we are progressing the business case for support in October.
The Early Talent Kickstarter Programme, designed for those at the early stages of their careers, takes place in October, a programme well worth considering for your early talent team members. Further information is available on the LMA Academy page of our website. Data Essentials takes place on 26 October and AI & Automation Essentials on 28 October. Both are introductory level and a few spaces remain on each.
It’s not only committee members’ views that matter; we also want to hear from managing agents who are not participants but on whose behalf the Board and committees act. If your organisation has a view on any matters we need to hear, please do get in touch.
The first half of 2026 was a very busy and productive time for the LMA’s Legal and Regulatory team. We’ve engaged on a diverse range of topics across the market while continuing to support our colleagues in Underwriting, Claims, Operations, Finance and Risk and the LMA Academy.
Below, we’ve outlined the key successes and activities the team has worked on and delivered. While not exhaustive, this summary offers a snapshot of the impactful work supported in H1.
For further updates on our ongoing consultations and focus areas, access our monthly Legal & Regulatory Radar.
Geopolitical work
The Legal and Regulatory Team’s geopolitical work has been dominated by Iran, including:
Shipping: Following the outbreak of the Iran conflict, we dealt with various issues arising out of notices of cancellation across marine classes and worked to correct press and political misinterpretation that these represented a withdrawal of war cover. We addressed member, regulatory and press questions on reinstatement, Strait of Hormuz transits, consequential delay, grip of the peril, the DFC scheme and payments for transiting territorial waters. The Joint War Committee amended restricted areas, including US military bases, and we spoke at a London Risk Week event alongside Antares. The Legal Committee also heard from Richard Waller KC on potential legal issues arising out of the closure of the Strait.
International waters and shadow fleet: We considered the risk implications of US/UK appetite to board foreign-flagged vessels in international waters and options for scrapping unusable ‘shadow fleet’ vessels involved in Russian oil shipping, including through RUSI and other discussions.
Aviation: At the Aviation Hull War Committee’s request, the LMA issued LMA5703 stating that underwriters could reasonably treat the resumption of Middle East operations after airspace closures as a material change of risk under LSW555D. LIIBA’s Aviation Committee has challenged this position. The LMA also reminded leaders of duties to inform followers of contractual changes and obtained legal advice from the top 10 aviation jurisdictions on automatic termination.
Sanctions: We received advice from Richard Neylon and John Kimbell KC on sanctions and terrorism issues linked to toll payments for Strait transits and they presented a webinar on the subject to the market. The LMA continues to work with Lloyd’s on sanctions and licensing changes, aiming to minimise divergence between US, UK and EU regimes. Key issues include changes to the Russian oil price cap, US sanctions on Iranian oil and Venezuela sanctions, and the practical implications of an increasingly fragmented sanctions landscape.
Tolls: We assessed the insurance implications of toll payments for Strait transits and engaged extensively with OFAC and OFSI on their interpretation. Following the sanctions event (above), we worked with Jawdat Kurshid KC to produce a clause supplementing the sanctions clause and discharging cover upon a toll payment being made. The clause and guidance were shared with OFAC and OFSI, and following consultation with insurers, brokers and regulators has been published.
War clause/five powers project: A CUO committee-led working group is considering how to improve certainty around the use of ‘five powers’ war clauses, where cover terminates on war between any two powers. The actual moment of termination is difficult to define when the ‘war’ is not ‘boots on the ground’. The work is expected to proceed in two phases:
agreeing a clause wording and examples of what will, and will not, constitute war between the five powers, and assessing use of a suspensory mechanism rather than automatic termination;
reviewing whether a more flexible mechanism, potentially involving an independent expert panel, could reduce disputes. Discussions continue with the market, LMG, reinsurers and brokers.
Other geopolitical work
Engagement has covered government backstops for war and NatCat exposures, insurance affordability and cyber insurance penetration in the SME market. On NatCat, we met EU Commission representatives to discuss options for closing protection gaps in Europe.
International engagement
Insurance Europe and Global Federation of Insurance Associations (GFIA) conferences: Arabella Ramage and John Levett attended the Insurance Europe annual conference and GFIA Spring General Assembly in Brussels in May, engaging with other national trade bodies 1:1 on geopolitical risk and local market issues.
RIMS: Arabella Ramage, with Gavin Williams from Starr, presented The Questions you did not Know to Ask: Insurance Across Jurisdictions, covering hazards and pitfalls in international placements.
Legal
Legal Committee: Katy Wilson of Ascot succeeded Rhic Webb of Aegis as chair, with Matthew Hunter of Asta and Alexandra Smith of QBE joining as new members. The committee has considered AI governance and lessons from Russian aviation litigation in the context of the Middle East conflict.
LIC Managing Agency Outsourcing Agreement: The Legal Committee considered LIC-requested amendments, many from the NBB. The final agreement will be distributed to the market in August.
Enhanced underwriting: We published ‘Navigating the risks of enhanced underwriting’ in the International Comparative Legal Guides (ICLG) to Insurance & Reinsurance 2026, covering additional risks in enhanced underwriting models. The chapter is available on the LMA website.
Product liability legislation: The Legal and Claims Committees had input into the LMA’s representations in relation to questions asked by the Law Commission on the potential reform of product liability legislation in the UK and in particular the incorporation of information technology/AI into products.
EU Retail Investment Strategy (RIS) watching brief: Proposed RIS amendments to the EU Intermediation Directive that could have affected third-country broker and carrier branches were deleted, but related work is expected in the IDD review from 2027. The Legal and Regulatory Committees will maintain a watching brief.
Trainees: Jay Desai joined the Legal Wordings Trainee Scheme and Dorottya Tornai qualified into QBE’s legal department. Current secondments are:
Max Gross – Convex
Muhammad Hammad – Munich Re Syndicate
Daniella Olu-Davies – Aegis
Emerging Litigation Forum
Shoosmiths presented key litigation trends for 2026, including AI implementation risks. A summary is available here.
Clyde & Co presented on recent litigation concerning social media addiction. A replay is available here.
Lawyers’ Forum: Kyle Moran and Alan Harrell of Phelps Dunbar presented on PFAS, toxic torts and public nuisance claims. Bob Haken and Will Reddie also presented on operational resilience following recent PRA policy statements.
Law and jurisdiction event: Harry Wright of 7KBW, Rani Noakes of 4 Pump Court and Katie Wilson of Ascot presented on the importance of law and jurisdiction in policies, available here. A US-focused follow-up is provisionally planned for 15 September.
FERN 3: Work has commenced in earnest on the review of FERN 3 aka the CPSA. We have engaged Clifford Chance in conjunction with the IUA to conduct a review of the draft contract.
Regulatory Committee
New members: Natasha Grasso (Berkley), Kevin Ball (Asta) and Natalie Dick (Riverstone) joined the committee in March, bringing new market perspectives.
International Forum: Simon French (Travelers) has taken over as chair for these sessions. Invites are now sent out as LMA bulletins so please sign up to attend these useful updates through the events page of the website.
Insurance Europe: The LMA has formally joined Insurance Europe, supporting our regulatory strategy and international influence. We are attending committees and reporting significant consultations through the Regulatory Radar.
Simplifying insurance rules: Following the FCA’s December 2025 policy statement, the LMA worked with members on market guidance, now published. We continue to lobby on the consumer definition and extra-territorial application of Consumer Duty, with further consultation expected in Q3.
PRA DyGIST: We supported risk colleagues on the PRA dynamic stress test, including Lloyd’s Market Day in February, and fed market reactions back to Lloyd’s and the PRA.
Non-Financial Misconduct: Following the FCA’s publication of updated guidance in December, the LMA coordinated with the IUA and LIIBA on a new webinar update to the market. This is available to rewatch here. We have also responded to the UK government consultation on use of non-disclosure agreements in employment disputes.
Operational Resilience: incident and material third-party reporting: March policy statements addressed several LMA concerns, but breadth and implementation remain issues. A working group is collecting views on proportionality and implementation costs.
Modernising redress and the Ombudsman Service: This work continues with more consultations released in Q1 alongside a policy statement. We are working with members of the RegCom and Conduct Committee on what work is needed in the application of these changes.
Lloyd’s Two Stage Complaints Process: The LMA supports moving from blanket Lloyd’s oversight to an outcomes-based approach focused on managing agent performance. Consultation ended in March, with implementation expected early next year.
Senior Managers and Certification Regime (SMCR): Phase 1 has gone live and phase 2 is expected for consultation later this year. The LMA is updating guidance and has circulated the FCA survey so managing agents can identify burdensome parts of the regime and support lobbying.
Saudi Arabia foreign reinsurer registration: The LMA worked with Lloyd’s international regulatory team to keep the market informed and requested an extension to the registration deadline. The deadline moved to the end of May and all managing agents are now registered. More information is available in Crystal+.
Financial Services Bill: We worked with the LMG and Lloyd’s on proposed changes to the draft bill to allow the PRA and FCA to rely on Lloyd’s for work such as on senior manager authorisation.
Other matters
Brazil: The LMA continues to work with local counsel on Brazilian regulatory changes. An amended Duty of Enquiry endorsement has been published, further endorsements are in development and we are working with Lloyd’s and the Brazilian insurance association on clause awareness and feedback.
India: Lloyd’s GIFT City platform in India went live in 2026 and the Lloyd’s multinational team also signed an agreement with a local fronting partner for use by the market on multi-national placements.
India have also begun the implementation of their mandatory Reinsurance placement platform ETASS Re.
The LMA is facilitating information sharing on these developments via our International Forum. Further information is available on Crystal +.
Cyber: We have created a simple modular SME product and are considering how cyber insurance can support key suppliers affected by cyber events. The SME product is being finalised.
Consultations: The LMA has reviewed and triaged 105 consultations and responded to 20, including The Mills Review into the long-term impact of AI on retail financial services:
The European Commission Fighting online fraud – action plan
The European Ocean Act
CP25/37: Targeted clarifications of Handbook materials – FCA
CP25/35: Quarterly consultation paper No.50
European Commission: Climate Resilience Framework Consultation 2026
CP25/33: Regulatory fees and levies: policy proposals for 2026/27 – FCA
Product liability – law commission
EU public procurement rules – revision
Consultation on the Appointed Representative regime
Ownership and Control Test in UK Financial Sanctions Regulation
Complaints Handling at Lloyd’s
Economic Crime Information Sharing
CP 26/9: Modernising the Redress System
Trade in a Turbulent World: How Should the UK Deploy Its Trade Instruments?
HM Treasury Market Engagement Group
Call for Evidence: Committee Inquiry – EU
Call for Evidence: Committee Inquiry – US
Targeted Consultation on the Competitiveness of the EU Banking Sector
Microsoft Business Software and IT Services Market Investigation
Welcome to the Q2 update, highlighting key activities and developments within the operations areas relevant to our market.
Much like for many of you, Q2 was a whirlwind of activity in the Operations world. I hope the update below reflects areas you are interested in, provides useful information to help fill in some gaps, prompts follow ups, and reminds us that many of the challenges and opportunities are shared.
Velonetic – Contract changes
Velonetic provides back-office processing services for premium and claims transactions to the market. These services are contracted directly between Velonetic and each managing agent. This contract is known as the FERN 2 contract and is due to automatically renew at the end of 2026. Under Blueprint Two, the intention was for the FERN 2 contract to be replaced by the Digital Processing Services Agreement (DPSA). However, with Blueprint Two having been “sunset”, either FERN 2 needs to be allowed to automatically renew, or a new contract must be signed.
In its current guise, the original FERN 2 contract cannot be automatically renewed because new regulations from the Prudential Regulation Authority (PRA) (SS2/21) would have to be incorporated. As a result, the Central Processing Subscription Agreement CPSA, commonly known as FERN 3, has been created, which meets these required changes as well as minor content and governance updates. However, these changes now require the submission of a Material Outsource Notification (MON), either individually or collectively by all managing agents.
The LMA, Lloyd’s and the PRA have sought to make this MON process as expeditious as possible. It is proposed that Lloyd’s be the submitting party for a collective MON for FERN 3. For this to progress, managing agent boards need to approve both the MON application and the FERN 3/CPSA contract. There is a restrictive regulatory window in which this can happen. The current timeframes are as follows:
MON approvals required by October 2026.
FERN 3/CPSA signing required in Q1 2027.
The LMA Board has been briefed and further guidance will be sent to compliance and COOs/SMF24 representatives. Please prepare to brief your board for the collective MON and identify your signing process with your board. If in doubt, contact Velonetic or me.
The LMG’s Data Council – data standards
We continue to work with the wider community, including the IUA, LIIBA, LMG, brokers, carriers, vendors, Lloyd’s, ACORD and SMEs to finalise the Core Data Record (CDR) standards. The final two CDR standards will be published on the LIMOSS Market Business Glossary (MBG) in September (Version 3.5), which will include Claims and Delegated Authority CDRs and will also include tagging for incremental CDR maximum required data items following the ACORD standards placing steps:
Initial (15* data items) – Categorises the contract type, creates a single reference for multi-party ingestion and tracking and support for early sanctions identification.
Submission (32* data items) – Expands the policyholder information, sets currency, limits and deductibles, and highlights the regulatory location for compliance.
Quote request (64* data items) – Full details for addresses and the nature of the insurable interest.
Quote (91* data items) – Premium details, claims agreement information and expanded classification data.
Bind (232* max possible data items) – Brokerage information, Tax and Fees, SoV’s**, exposure measures and any remaining detail.
*Maximum data items **Schedule of Values (SoV) if required
Data standards are the enabling services we collectively need to adopt to help simplify how we share our data and process business from enquiry to claims payment. We have a “coalition of the willing” working to create a library of use cases so you can see how others have progressed on their own data journeys. These will be published in July on the LMG website primarily and linked from the IUA, LMA and LIIBA websites (Digital Market – London Market Group).
To support adoption and to help drive standards, we held a joint event with Ruschlikon in June 2026. The event provided the opportunity to showcase real worked examples where standards have been put to work to remove operational efficiencies, increase straight through processing, and bring distribution and capacity providers together. My favourite observation came from Kim Darrington as she introduced her role in the IUA and speakers from Ruschlikon to a mixed audience of company and Lloyd’s market people at an LMG Data Council-sponsored event in the Old Library – a true meeting of all those interested in data.
Broker performance MI dashboard – aged debt empowerment
The Broker MI Dashboard Service, developed with Velonetic, was launched in February. Adoption is going well but please do look at this service to help your premium collection from brokers. The tier 1 service is available to all managing agents, with a tier 2 service available for those who want more detailed data. Further information is available at here.
Urgent Settlement Framework (USF)
Following earlier delays at Lloyd’s, a phased approach to enhancing the Urgent Settlement Framework has now been agreed. The updated framework, scheduled for publication in July, is intended to provide greater assurance in the market’s ability to operate for up to 10 days under disruption scenarios of Velonetic and Lloyd’s. In line with feedback received from several LMA committees, the second phase of the programme, in H2 2026, will focus on assessing additional scenarios and identifying potential solutions to extend operational capability beyond the initial 10-day period. For more details, contact Matt Wood.
Delegated authority (DA) – change
There are several change activities underway in the DA space, including:
Computable Binding Authority Agreement (CBAA) The wordings are on track for a complete refresh this year. In line with DARE, the intention is to enable the sharing of the wordings and rules via an information model and set of APIs, leveraging existing contract-building partners. An ambitious project with high complexity and high value.
CBAA model wording is now available onlmadare.co (2024/2025) for a period of market familiarisation.
External legal review of the model wording by Andrew Schutte from Keoghs to commence mid-July, with the aim of joint instruction by a consortium of London market associations.
The Wording Objects Library (WOL) design was approved in early June and build is now underway as part of LIMOSS’ Market Business Glossary (MBG).
Contract Builder engagement is underway and we expect to share the WOL API with them in September.
Get involved by joining a series of ‘CBAA Module Deep Dives’ taking place in the next couple of months – schedule to be announced next week with all sessions recorded.
Delegated Authority Streamlined Compliance (DASC) including delegated claims administrators (DCAs)
We continue to work with users, SMEs and Lloyd’s to ensure the question sets are appropriate for the use cases across the market.
At February’s COO Forum, we had an interesting presentation from Mohit Sharma of Lloyd’s Singapore, providing updates on the various offices across APMEA, including Gift City India, Japan, Singapore and more. This was followed by an informative AI presentation from MEA looking at the work they are doing across the market for customers and suppliers. If you would like more detail, please reach out. For more details, contact Matt Wood.
Third-Party Risk Management (TPRM)
We are aiming to support centralised due diligence with standardised question sets and document collection on the basis of ‘ask once, share to many’. This will not replace the need to evaluate the due diligence, based on your own risk appetite, but it will allow vendors and market participants a one-stop-shop for TPRM. This will also provide a good overview of concentration risks at the aggregated level as well.
The RFP is well underway and we are targeting a live service towards the end of 2026. For more details, contact Jane Perry.
Expert fees
The pilot concluded in May and has now been rolled out across all classes with Velonetic in conjunction with the IUA and LIIBA.
Developed as a joint market initiative, the scheme addresses long-standing challenges in the settlement of expert fees. The scheme aims to:
expedite the payment of surveyor and expert fees and clear back-year invoices
reduce administrative friction in obtaining underwriting share data
support the continued viability of expert survey services.
Operational Resilience Scenario Testing Essentials took place on 10 June and the intermediate programme is under development and due to launch in Q4.
Registration is open for the Early Talent Kickstarter programme, designed for those at the early stages of their careers. The programme commences in October. Further information is available on the LMA Academy page of our website.
The LMA Operations Committee (LMAOC) meetings take place on 15 July, August (TBC) and 17 September.
FERN 3/CPSA dates:
MON approvals required by October 2026.
FERN 3/CPSA signing required in Q1 2027.
September – Next COO Forum (exact date TBD).
You can find details of current committee participation on the relevant LMA website pages (Board and LMAOC), alongside a brief summary and minutes of the monthly Operations Committee meetings (login required). Details of the Delegated Authority Committee participants are also available.
It’s not only committee members’ views that matter; we also want to hear from managing agents who are not participants but on whose behalf the Board and committees act. If your firm has a view on any matters we need to hear, please do get in touch.
An update from the LMA’s CEO, Sheila Cameron, to managing and members’ agent CEOs.
Sheila Cameron
Chief Executive Officer
Overview
Q2 was dominated by the situation in the Middle East, the Dynamic General Insurance Stress Test (DyGIST) and the five powers war clauses project. Please note the section below in relation to Velonetic, as there is a probable requirement for your board to approve both a regulatory submission, as well as a new contract. Updates on these matters are provided below.
Primary areas of market focus during Q2 2026
Q2 market message
Rachel Turk’s Q2 market message focused on the current rating environment and the consequences for 2027 business planning. She stated that rate is declining at a faster pace than anticipated, with adequacy now under threat for 2027 (see slide below). As such, plans should focus on margin, expenses, cycle management approach and sustainable profitable growth.
Mirjam Spies (Lloyd’s Acting Chief Actuary) spoke about Lloyd’s capital planning expectations, noting that, although planned loss ratios typically stay relatively flat over the cycle, actual loss ratios have tended to exceed those planned levels, particularly in softer cycles. She stated that she expected syndicates to reflect market conditions in both their plan and capital model loss ratio, and that Lloyd’s would accept these figures being different, as long as there was an appropriately robust explanation for the difference.
Mirjam also announced that the Lloyd’s Partial Internal Model (PIM) will move from a pilot phase in 2026, to a wider rollout in 2027. A PIM is an internal model that replaces one or more components with a simplified methodology, subject to defined guardrails. Only market, credit and operational risk are in scope for the PIM (underwriting risk, including reserving risk, remains subject to the full internal model) and total overall capital cannot reduce by moving to the PIM.
2027 business planning process:
There have been questions regarding the 2027 business planning process and in particular about the role of Market Oversight Managers, given the vast majority of them are new to Lloyd’s this year. Lloyd’s will shortly be providing an explanatory overview of the plan approval process, as an addendum to the SBF instructions, which have recently been issued.
At a high level, plans are reviewed by three sub committees of the Capital Planning Group (CPG) in the first instance. CPG is chaired by Rachel Turk and the members are largely the same as the Lloyd’s ExCo. The detailed work around planning takes place with relevant subject matter experts, as well as the Syndicate Performance Managers, at this subcommittee level. The three main subcommittees of CPG are:
(a) Performance and planning, chaired by Catherine Marshall (Lloyd’s Director Syndicate Performance and Claims). This group is very much driven by the information provided by the Syndicate Performance Managers, who play a critical role in plan reviews.
(b) Capital and reserving, chaired by Mirjam Spijes (Lloyd’s Acting Chief Actuary)
(c) Reinsurance and exposure management, chaired by Rob Stevenson (Lloyd’s Head of Exposure Management)
There is a fourth group, which seeks to ensure consistency across the three sub committees (e.g. that reserving approaches are consistent with underwriting approaches by class of business).
Each of the three subcommittee chairs writes up their conclusions on each syndicate’s plan. These written outputs are then collated together by the Market Oversight Manager (the written output used is that created by the chair of each subcommittee – it is not written by the Market Oversight Manager), together with additional detailed information such as the SOAP findings and any particular oversight points that should be drawn to the attention of CPG by the Market Oversight Manager. The role of the Market Oversight Manager is therefore to facilitate an integrated view across all the Lloyd’s functions, ensuring clear communication, regular holistic engagement and no surprises between both syndicates and Lloyd’s subject matter experts.
Dynamic General Insurance Stress Test (DyGIST)
The DyGIST exercise took place in May 2026 over a three-week period, with different scenarios brought together to happen around the same time. These scenarios were a north Atlantic hurricane, a Pacific northwest earthquake, a UK windstorm, a supply chain cyber attack and a global market downturn.
The positives noted by the market included:
Good preparation by everyone involved.
From a capital perspective, there was more resilience than anticipated across the market (though some firms were heavily impacted). There is a follow-on question here about how best the market could better leverage our collective balance sheet.
Generally speaking, the open and transparent communications from the PRA and Lloyd’s, supported by regular LMA cross-market forums to assist on interpretation of scenario assumptions, was appreciated by the market.
Good lessons learned for most firms on internal governance and cross-functional collaboration.
The areas to work on noted by the market included:
For some firms (not all) there was a perceived lack of proportionality in some of the templates requested by Lloyd’s and a view that the PRA request of non-Lloyd’s firms was more proportionate.
Timing and resourcing pressure – earlier notification from Lloyd’s on Syndicate Business Forecast and Lloyd’s Capital Return requirements, together with earlier clarity on the expected level of detail required for SBF and LCR, particularly at a time when SBF teams are prioritising the 2027 SBF and LCR.
Uncertainty on capital recalculation process, which necessitated follow-up communications from Lloyd’s.
Geopolitical matters:
Gulf
The situation remains highly uncertain with a shaky ceasefire allowing some transits. The MOU that has been publicised lacks detail, specifically in relation to how it will work with existing sanctions and terrorism legislation in the EU, UK and US. The LMA continues to lobby for consistency of sanctions regimes across the EU, US and UK.
The partial unilateral and partial lifting of sanctions on Iranian oil by the US does nothing to dispel the confusion for insurers, not least because Iran has issued notice that it may be considering some form of future charge for transit. If this transpires, the economic consequences for the supply chain could be significant, particularly if other states choose to follow and try to charge for transit of territorial waters in breach of UNCLOS (the UN Convention on the Law of the Sea).
The LMA has prepared a clause for use by underwriters being asked to ensure transits of the Strait of Hormuz are protected appropriately with respect to a vessel paying a toll. Our guidance and the clause are under discussion with OFAC (US sanctions authority) and OFSI (the UK equivalent). It has involved significant consultation with insurers in various markets and the brokers.
It is expected that Lloyd’s will issue a request for a major loss data call as at the end Q2 for the situation in the Gulf.
Five powers
The LMA continues to engage with multiple brokers, carriers and regulators about the existing five powers clause used in the marine and aviation markets and clarity around same. In particular, the question is how we achieve contractual certainty as to the trigger for termination of a contract under the war clause when a government does not formally declare war.
It is likely that this work will be split into two phases – first, an agreement on a clause to add scenarios that underwriters and insureds can agreed on what will and will not be considered war between the five powers, for instance, incursion of a drone into airspace without damage. This will give a better level of contractual certainty as to what triggers automatic termination and what does not. We will also be assessing whether we can propose a suspensory mechanism rather than an automatic termination provision, which may be more contract certain in non-UK jurisdictions. This would be similar to the suspensory operation of the LMA sanctions clause.
The second phase will review whether it is possible to agree a mechanism that will be able to address the actual conditions being faced with more flexibility and also reduce the likelihood of a dispute. We have been discussing reference to an independent panel of experts. This proposal is more radical and will take time to discuss with overseas markets and brokers. ers clause. Consultation has taken place with the impacted LMA committees, as well the London Market Group (LMG), major brokers, major reinsurers and regulators, with more consultation and follow-up activity underway.
Velonetic contracts:
Velonetic provides back-office processing and payment services for premium and claims transactions to the market. These services are contracted for using a standard contract between Velonetic and each managing agent. This contract is known as the Fern 2 contract and it is due to be automatically renewed at the end of 2026. Under Blueprint Two, this contract was supposed to be replaced by the Digital Processing Services Agreement (DPSA). However, with Blueprint Two having been “sunsetted,” either Fern 2 needs to be allowed to automatically renew or a new contract must be signed.
In its current guise, the original Fern 2 contract cannot be automatically renewed, because new provisions (which are a requirement of PRA material outsourcing rules) will have to be included, as well as some of the changes required for transfer of data. As a result, Fern 3 (formally known as Central Processing Subscription Agreement – CPSA) has been created, which meets these requirements, as well as minor commercial and governance changes. However, these changes now require the submission of a Material Outsourcing Notification (MON) to the PRA, either individually or collectively by all managing agents and also by Lloyd’s.
The LMA, Lloyd’s and the PRA have sought to make this MON process as expeditious as possible. It is proposed that Lloyd’s be the submitting party for a collective MON for Fern 3. In order for this to progress, managing agent boards need to approve firstly the MON application itself and secondly the actual Fern 3 contract. There is a very tight regulatory window in which this can happen, with agreement from boards to submit the MON approvals by October 2026 and agreement to sign the Fern 3 contract required by the end of Q1 2027. Your COO should contact Joe Brace (LMA Operations Director) for further details or Ray Koh (LMA Legal Counsel) with respect to the legal aspects. Later in July, the LMA will publish a summary paper that can be used by COOs to present an overview of the matter to their boards.
Cultural and training matters:
Lloyds published its 2026 Culture Dashboard showing continued progress across the market. In the last year, Lloyd’s has seen consolidation of the good progress the market has made since 2020, with Culture Survey scores in particular performing well against financial services benchmarks. Insights can be used to ensure the Lloyd’s market remains attractive to existing and future talent. The dashboard can be found here and the LMA shared the details of the results on LinkedIn, available here.
In April, Lloyd’s announced it was running a structured market consultation from May to July 2026, to create a new programme, in place of Dive In, to support and enable culture, skills and talent across the market. Please click here to access it.
Notable people changes at Lloyd’s, FCA, PRA and the LMA:
Matthew Bellamy joined the LMA as Underwriting Director.
Sean McGovern, Vicky Carter and Marcus Johnson were all re-elected to Lloyd’s Council unopposed.
Jim Bichard joined Lloyd’s as CFO in late April.
The FCA has appointed Chris Knight as the new director of insurance with effect from 01 July. He was latterly the CRO of Legal and General.
Katharine Braddick has been appointed as the new CEO of the PRA, succeeding Sam Woods on 01 July. She was latterly Group Head of Strategic Policy at Barclays.
Looking forward to Q2 2026 areas of focus
2027 business planning season.
Continued market response to geopolitical matters.
Definition of war triggers (five powers).
Consideration of marine war notice of cancellation provisions.
Working with Lloyd’s on the implementation planning of its strategy.
LMA’s project to digitise wordings.
Launch of new computable binding authority agreement model wordings.
Contractual discussions with Velonetic around renewal of the existing service contract and consideration of material outsourcing.
LMA Academy programmes scheduled for July include Introduction to Lloyd’s and the London Market, Data Essentials, AI and Automation Essentials, Legal Essentials for Early Talent, Conducting Business in the US (Katie School), Introduction to the Insurance Market Cycle, Liability Contract Wordings, Insurance Financial Statements for GAAP Reporting and Commercial Acumen for Underwriters. In September, several multi-module programmes commence including Introduction to Contract Wordings, Claims Essentials, Claims Management, Introduction to Fine Art & Specie, Cyber Insurance, Business Interruption Insurance and Introduction to Insurance Market Cycles.
Key areas of focus across LMA committees and forums that took place during Q2 2026
Committee
Areas of focus during Q1 2026
Underwriting (Matthew Bellamy)
– Please see above for notes on geopolitical matters. Additionally, the LMA was invited to brief the Organization for Security and Co-operation in Europe in Vienna on the market’s approach and reaction to the Gulf conflict and sanctions. The LMA was also approached by the Pakistan government on both their listing status and in respect of a vessel with Pakistani crew.
– The CUO Committee has reviewed and agreed its current priorities: focus on systemic/evolving risks; influence and drive change at Lloyd’s; market performance (data); distribution (e.g. enhanced underwriting); managing issues escalated from various underwriting committees.
– The LMA has launched the London Market Fee Payment Enablement Scheme. This cross-market initiative tackles long-standing delays in pre-risk survey fee payments by improving access to underwriting data and enabling more efficient submission processes to Velonetic.
– The LMA has continued to collaborate with local counsel in Brazil to resolve queries stemming from Brazilian regulatory changes. An amended Duty of Enquiry endorsement has been published. Further endorsements are under development and the LMA is anticipating changes to the proposed insurance regulations follow a meeting of SUSEP’s board (government agency responsible for regulating and supervising the (re)insurance market) to consider feedback from the public consultation. The LMA is also working with Lloyd’s and the local Brazilian Insurance Association to promote understanding of the LMA’s published clauses. We are also considering their feedback on existing clauses.
Committees: – The CUO Committee has continued to explore the risks associated with underwriting data centres, particularly with regards to aggregation and exposure management. A series of expert presentations are planned for the summer to further market education on this growing area.
– The Aviation Committee and Aviation Hull War Forum are exploring options to become joint committees.
– The Joint Natural Resources Committee published updated marine warranty survey guidance relating to Dynamic Positioning operations, strengthening risk management and oversight requirements.
Events: – The LMA hosted insight sessions on trends in the LMA international Bodily Injury Index with speakers presenting on local data from Ireland, Italy, Northern Ireland, Australia, Canda, Chile, Mexico and Colombia.
– An event was also hosted on emerging legal trends and coverage issues regarding PFAS and other contaminants in Europe and the US, with more than 250 members joining. An Old Library session was held for the French Defence Studies Institute (IHEDN) with assistance from BCS and the IG.
– In cyber, the LMA have spoken at the Zywave and RIMS conferences, while also engaging widely with the market on cyber SME strategy.
Wordings: The LMA has published 39 new wordings in 2026 so far, with 20 wordings added in Q2. These include a new UK SME commercial property and business interruption policy, minor updates to a suite of Australian wordings, an updated sanctions clause for the Joint Natural Resources Committee and two new contingency reinsurance endorsements. See the geopolitical update above around a clause in respect of the payment of tolls relating to transiting the Strait of Hormuz.
Finance Engagement with Lloyd’s and market priorities: The new Lloyd’s CFO Jim Bichard outlined his initial areas of focus at the May Finance Committee meeting. These focus areas include maintaining Lloyd’s capital advantage, reinforcing underwriting discipline and improving the market’s attractiveness to capital providers. There was also an emphasis on leveraging technology to improve reporting processes and reduce effort and cost across the market.
Reporting rationalisation, data and capital provider initiatives: There has been high levels of participation in QMA delta workshops (part of the reporting rationalisation project) and Lloyd’s is due to present initial findings and proposals to the steering committee in late July. The LMA is leading the workstream to define baseline data requirements for what managing agents with third party capital should provide to members agents and their capital providers. The output is a data definition rather than a new reporting tool and is on target to be published by the end of July. Lloyd’s has now sent managing agents syndicate-specific feedback on the tagging and we continue to press Lloyd’s to reduce the audit requirement before 2026 year end.
Finance talent, skills and capability – survey findings: a central focus during Q2 has been the Finance Committee’s market-wide survey on finance talent and recruitment, available from the LMA team. The results will be reviewed by the Finance Committee in July and then circulated to the market.
Treasury and Investments (TIG) Asset Infrastructure Programme: Continues to progress, with tranche one integrations built and data onboarded. A trial run will be issued to participating managing agents for validation, while work continues on tranche two. A direct feed from Clearwater has been dropped on cost grounds, so additional feeds from asset manager/custodian systems are needed to realise benefits. Lloyd’s will be providing a market briefing on 20 July.
Market investment performance: Vesta presented an analysis of 2025 year-end data. The discussion highlighted reduced cash holdings as rates increased, broadly consistent credit quality across syndicate sizes and continuing dispersion in investment returns across the market. Further details can be found here.
Governance: The Lloyd’s Investment Committee has been changed to an executive committee; representation from managing agents will continue.
Actuarial (see above for DyGIST) Lloyd’s 2026 business planning and LCR process: Lloyd’s confirmed that LCR instructions and focus areas materials have been published following review by an LMA working group. The business planning and capital process will again operate across three phases, with a two-week extension available for phase two submissions, where requested.
Planning and model loss ratios: The Committee of Actuaries in the Lloyd’s Market (CALM) discussed market concerns around the relationship between planning loss ratios and model loss ratios. Lloyd’s clarified that the model loss ratio should be greater than or equal to the planned loss ratio, not necessarily strictly greater.
Partial Internal Models: The partial internal models pilot is continuing; managing agents interested in participating are still encouraged to contact Lloyd’s.
Exposure management (see above for DyGIST) Q3 reporting and data quality: Lloyd’s expects only limited changes to the model completeness questionnaire, RDL and LCM documentation.
Capital Planning Group: Lloyd’s has completed 62 planning and oversight reviews in H1 2026 and will shift focus in H2 toward assessing non-natural catastrophe expected maturity on both the current basis and the proposed updated basis.
RDS framework: Work is also underway on a RDS framework to formalise the updating, replacing and where appropriate, sunsetting of requirements.
Risk Lloyd’s risk and governance oversight: Ross McGee, Lloyd’s newly appointed Director of Market Oversight Delivery, joined the May CRO Committee meeting to introduce his role and provide an update on the direction of Lloyd’s oversight delivery. Lloyd’s noted that the Principle 10 (governance and risk management) oversight team is expanding.
Geopolitical risk: The LMA CRO Committee arranged a briefing session with Control Risks in April, followed by a briefing note for members, which summarised key themes and implications for Lloyd’s managing agent risk functions. A high-level guide on assessing geopolitical risk is also being developed.
Supply chain risk: CRO Committee members also supported London Risk Week through participation in a joint Lloyd’s Operational risk/LMA Operations roundtable on supply-chain risk.
Stress and scenario testing: The Risk Next Generation Committee’s stress and scenario testing workstream is finalising a proposed framework intended to support risk functions with a practical approach to using stress and scenario tests to guide decision-making and provide insight to key stakeholders and decision-makers.
Risk talent and function benchmarking: Talent remains a key CRO Committee priority for 2026. Building on the Q1 update, the LMA has now launched a market-wide benchmarking survey of risk functions, in partnership with Teneo, to support a more structured and data-led understanding of how risk capabilities are evolving across the Lloyd’s market. CRO Committee membership refresh is currently underway. Sustainability and Climate Risk Working Group (CRWG) PRA climate risk expectations: The Climate Risk Working Group (CRWG) continued its focus on supporting managing agents with implementation of PRA SS5/25, with particular emphasis on gap analysis submissions and practical approaches to demonstrating compliance. A practical CSA playbook for the market is also being developed – the introductory webinar recording and slides are available on the LMA website.
Climate materiality assessment – survey results and emerging practice: The CRWG shared the results of its market-wide climate materiality survey, providing a benchmark of current practices across managing agents. The survey findings indicate that the market is actively engaging with climate-related risk, with the strongest progress seen in physical risk assessment and in embedding climate considerations within existing governance and enterprise risk management frameworks.
Sustainability Committee repositioning and engagement with CUO Committee: The Sustainability Committee has restructured to provide more support to the LMA Chief Underwriting Officer Committee (CUOC). There was strong interest in increasing collaboration on topics such as the intersection of AI and sustainability, especially in the context of emerging sustainability considerations linked to data centres, clients’ transition plans and the importance of sustainability-related data in underwriting decision-making.
Insurability and external market engagement: Throughout the first half of the year, Sustainability Committee members also supported the development of the ClimateWise Insurability Readiness Matrix (‘the Matrix’), contributing as part of the advisory group. Members interested in exploring the framework further are encouraged to download the report and supporting guidance from the ClimateWise website: ClimateWise Insurability Readiness Matrix publication.
Claims (Janine Powell)
LMA Claims Committee (LMACC): In April, the LMACC, supported by Deloitte, agreed collective strategic claims priorities and defined its role in delivering them. Members are now gathering feedback from Heads of Claims ahead of publication in Q3.
Middle East conflict response: Coordination by the LMA Complex Claims Group continued through Q2, with strong support from Political Violence & Terrorism, Political Risk, Marine, Property and Energy groups. McKenzie Intelligence Services, experts and law firms provided situational and jurisdiction-specific insights.
Cyber Claims Group: Concluded its vendor visit programme, enabling emerging cyber professionals to follow the lifecycle of a ransomware claim through a programme of six one-day placements with expert firms. The programme was well received and is expected to return next year.
Property Insurance Claims Group: Hosted another sell-out conference with record attendance. The theme of the conference was exploring crisis management through the most complex claim examples. The group also ran emerging professionals, women in property and PICG Academy events.
Reinsurance Claims Group: Hosted a half-day conference attended by more than 150 people. This year’s ReConnect programme examined casualty claims trends, the data centre boom and the challenge of distinguishing perception from reality.
New – Joint Healthcare Claims Group: Launched with the IUA, bringing together healthcare and medical malpractice claims professionals across the Lloyd’s and London market.
Delegated Authority Claims: Following consultation, DACMG published its vision and strategy for a simplified operating framework supported by technology, oversight and data-driven insights. Claims remain a key stakeholder in the streamlined compliance programme, with future technology expected to enhance due diligence and DCA performance oversight.
Emerging Professionals Claims Group: Continued to host networking and technical development opportunities, including a spring quiz and, with Norton Rose Fulbright, the first technical skills session focused on mediation as a dispute resolution tool.
Legal & Regulatory (Arabella Ramage)
Legal Gulf Conflict: In addition to the geopolitical update above, the LMA Legal Committee had a presentation from Richard Waller KC on the grip of the peril. We have responded to numerous questions from regulators, the press and made presentations on the operation of notice of cancellation provisions.
Aviation: At the request of the Aviation Hull War Committee, the LMA issued LMA5703 informing the market that resumption of operations in the Middle East following closure of airspace would be considered by underwriters to be a material change of risk for the purposes of LSW555D. Therefore, brokers should accordingly inform underwriters of their insureds’ intentions to resume operations in this regard. In addition, the LMA issued a reminder to leaders of their duties to inform followers with respect to contractual changes, such as cancellation, for example. Finally in respect of aviation, the LMA obtained legal advice from the top 10 aviation jurisdictions about the effectiveness of automatic termination.
Sanctions: We delivered advice from Richard Neylon and John Kimbell KC on sanctions and terrorism legislation applicable to insuring vessels transiting the Strait after payment of a toll. This resulted in preparing a draft clause with Jawdat Kurshid KC, who assisted with the recent LMA sanctions clause and advice for the market. There were also numerous interactions with US, UK and EU regulators in this respect. The LMA continues to collaborate with Lloyd’s regarding changes to sanctions and licensing, with the goal of minimal divergence between US, UK and EU sanctions. Of particular note in this respect is the temporary lifting of the Russian oil price cap, changes to US sanctions on Iranian oil and lifting of US Venezuela sanctions that would enable shipping and investment in oil in Venezuela.
LIC outsourcing agreement: The Legal Committee considered amendments to the managing agency outsourcing agreement requested by LIC. This agreement needs to be signed by the beginning of August.
Events: The LMA hosted a session presented in collaboration with Clyde & Co on social media addiction.Additionally,Harry Wright of 7 King’s Bench Walk, Rani Noakes of 4 Pump Court and Katie Wilson of Ascot presented in the Old Library on the importance of law and jurisdiction in policies. A subsequent event focusing on the US is provisionally planned for late September.
Regulatory Operational Resilience incident and material third party reporting. The policy statements issued by the PRA and FCA have addressed a number of the key concerns articulated in our feedback. However, we remain concerned at the potential breadth of required reporting and its implementation. We have established a working group to collect thoughts on how to achieve proportionality and express the potential cost of implementation.
Saudi Arabia foreign reinsurer registration: TheLMAworked closely with Lloyd’s international regulatory team to keep the market well informed of developments. We have also requested the Saudi regulator to extend the deadline for registering foreign reinsurers in order to ensure continued access for the market in major 1/4 renewals. The deadline was extended to the end of May and all managing agents are now registered. More information is available in Crystal+.
Senior Managers and Certification Regime (SMCR): Phase 1 of the new SMCR has gone live and we are expecting phase 2 to be consulted on later this year. The LMA is working to update our existing SMCR guidance to ensure alignment with the new rules in advance of the phase 2 consultation. We have sent a survey issued by the FCA to managing agents in order for them to be able to articulate the parts of the regime causing most burden.
Lloyd’s Two Stage Complaints Process: Currently eligible complainants have a right to escalate a complaint to the Lloyd’s complaints team if it remains unresolved after four weeks. The LMA believes there is little benefit in Lloyd’s continuing to have blanket oversight of complaints and are supportive of an outcomes-based approach, which monitors managing agent performance and intervenes to a greater or lesser extent as a result of that performance. The formal consultation ended in March, with implementation expected for early next year.
Financial Services Bill: We worked with the LMG and Lloyd’s on proposed changes to the draft Bill to allow the PRA and FCA to rely on Lloyd’s for work such as on senior manager authorisation.
Consultations: In Q2, the LMA reviewed and triaged 55 consultations and responded to 11 of them, including complaints handling at Lloyd’s, the Law Commission consultation on product liability, HMT trade in a turbulent world, Microsoft Business Software and IT Services Market Investigation, House of Lords calls for evidence on trade with EU and US. The responses to these and other consultations are always available on the LMA website.
HR, Culture & LMA Academy (Fiona Temple)
– Following the successful Underwriting Talent Summit in November 2025, several LMA Board members chose to take visible action as a result. Six LMA Board volunteers agreed to support and sponsor a pilot initiative called “LMA Leadership Futures.” The Board volunteers each nominated a senior female underwriter from their firm to take part. The programme aims to create access to people, networks and decision makers and to remove barriers to progression by providing structured exposure to sponsors, market visibility and strategic opportunities across the market.
– As part of the Dive In consultation, the LMA circulated a survey and hosted two roundtable discussions run by Lloyd’s with HRDs and Heads of Talent.
– Our annual employment law update focused on practical guidance to HRDs on navigating imminent Employment Rights Act (ERA) changes and ensuring organisations are well prepared for effective performance management, with a focus on how managers can model best practice and address more complex areas.
– Work commenced on the design of a second online gamification elearning offering focusing on understanding syndicate financial ratios and metrics. The module will launch later in 2026. The design of several new programmes progressed in Q2. This included work on new Aviation, Contract Wordings FinPro and Cat Modelling offerings. Design on a new Legal Essentials for Early Talent has been concluded and the course will run in early July.
– The LMA hosted an update session on Non-Financial Misconduct in collaboration with LIIBA and IUA. This session explored the new rules which come into effect on 01 September 2026. The SME presenters were from EY and Inclusio.io, looking at governance, processes and data collection for cultural indicators. A replay can be found on our website.
– Following its win in 2025, the LMA Academy was awarded Highly Commended in the 2026 London Market HR & L&D Supplier of the Year category at the Market People Awards hosted by London Market Forums.
– The LMA Academy delivered 15 events during Q2, with 227 delegates amounting to ~1,800 market learning hours. Key events conducted in Q2 included Introduction to Lloyd’s and the London Marketplace; Commercial Acumen for Underwriters; Driving Portfolio Performance; Introduction to Python; Corporate Financial Statements for Underwriters; Introduction to terrorism Insurance; Cyber Incident Desktop; Claims Operations Programme; Insurance Market Cycles and Operational Resilience Essentials. A new course, Regulation Essentials for Early Talent launched in June.
Operations & Delegated Authority (Joe Brace)
LMG’s Data Council: An event was held on 24 June looking at data standards across the Lloyd’s, London and international markets in conjunction with Ruschlikon and ACORD. For more information, contact Joe Brace.
Core Data Record (CDR): The delegated authority CDR consultation has completed and will be published in August as version 3.5 on the LIMOSS Market Business Glossary (MBG). Open market, treaty and claims CDRs have been completed already, so this marks the final CDR. The incremental CDR stages will also be tagged in line with ACORD standards. These are: initial stage (up to 15 data items); submission stage (up to 32 data items); quote request stage (up to 64 data items); quote stage (up to 91 data items); and bind stage (up to 232 data items). The current published version of the CDR (3.3) can be accessed via the Market Business Glossary (MBG) on the LIMOSS website.
Broker performance dashboard: This dashboard shows aged debt and broker payment times by broker for each carrier. This dashboard continues to gain traction in the market with carriers able to monitor and see bottlenecks around late signed premium and identify the reasons behind Broker LPAN rejections (right first-time submissions and LPAN rejections). The tier one service is free to all managing agents with further detail available, via a tier two service, if desired.
Operational resilience testing: The LMA completed the first co-ordinated vendor test using a claims system supplier for 21 managing agents in Q2 2026. This is expected to be the first of a regular exercise using a shared vendor. Results and feedback are available and being discussed with the operational resilience committee.
Blueprint Two: Further communications in relation to Blueprint Two are expected in the coming months. This is being monitored closely by the LMA Operations Committee. The operational resilience improvements have been shared and are supported. Timeframes for implementation for areas such as Multi Factor Authentication (MFA) are due in Q3.
Third party risk management: This is to provide a central due diligence service for market members to use for shared vendors – the questionnaires will be standard and documents collected will be stored once, so that they can then be used multiple times. The RFP has completed and a vendor will be selected in Q3.
Computable Binding Authority Agreement (CBAA): The CBAA model wordings are now available on LMA Dare | Home. This is the culmination of a lot of market-focused work and a real win to update some very outdated wordings and ensure we are future proofing. An external legal review of the completed model wording will take place across the summer, following which a version one of the CBAA will be published in analogue form on the Lloyd’s Wordings Repository (LWR). Build of the ‘Wording Objects Library’ (WOL) is underway as an extension of the LIMOSS Market Business Glossary (MBG). The WOL will store the wording in its digital form and allow Contract Builders to consume the content via API. WOL go-live is targeted for 2027.
Delegated Authorities Streamlined Compliance (DASC): Linked to Delegated Claims Administrators (DCA) use cases. We continue to collaborate with users, subject matter experts and Lloyd’s to ensure the question sets are appropriate for the use cases across the market and have engaged an independent consultant to ensure we can finalise an acceptable question set for all.
Urgent Settlement Framework continues to be delayed, with several committees across the LMA, escalating the need for clear guidance in the event of a central settlement outage. The revised phase one guidance is overdue and is only covering the first 10 days of an outage. Further phases are expected to extend this timeframe and provide more guidance on a wider range of scenarios.
Risk, Sustainability and Climate Risk Update, Q2 2026
9th July 2026
Paul Davenport
Finance and Risk Director
Welcome to our latest report on key activities and developments within the Risk, Sustainability and Climate Risk areas relevant to the market arising in the second quarter of 2026.
Risk
During Q2, the PRA’s DyGIST exercise was the primary focus of the Chief Risk Officers (CRO) Committee activity and wider LMA risk engagement. The PRA DyGIST exercise was framed as a live “fire drill” rather than a model validation exercise, with the PRA focused on firms’ preparedness, responsiveness and reflection.
In advance of the live phase, the LMA hosted three drop-in sessions for CROs and chief actuaries. These sessions were designed to provide an overview of the PRA and Lloyd’s communications, address member questions and gather views on how the LMA could support members during the live exercise.
During the live phase in May, the PRA issued scenario injects across a three-week live exercise. The scenarios subjected the market to a sequence of severe and compounding systemic shocks, including a global market downturn, systemic cyber event affecting manufacturing operations, Pacific Northwest earthquake and tsunami, North Atlantic hurricane, UK windstorm and reinsurance recovery stress.
The CRO Committee meeting on 07 May provided an early opportunity for members to reflect on the first week of the live phase. Members discussed different approaches to governance, including the use of proxy boards, proxy executive committees, diary-based approaches, daily stand-ups, end-of-day updates and delegated review groups, while avoiding formal board meetings as instructed by the PRA.
The LMA arranged four drop-in sessions during the live phase to support risk and actuarial members by providing a forum to discuss areas of uncertainty arising from the scenario injects and corresponding Lloyd’s templates. These sessions were also used to collate questions for Lloyd’s, where appropriate, thereby supporting the ongoing dialogue between the LMA, managing agents and Lloyd’s during the live exercise.
The live phase concluded on 26 May. Lloyd’s has since allocated in-scope syndicates to either a Core or Enhanced cohort, with Enhanced syndicates subject to fuller PRA and Lloyd’s reporting requirements. The LMA has engaged with Lloyd’s on the post-live reporting requirements, emphasising the need for proportionate, best-efforts reporting, clarity of assumptions and the minimisation of additional reporting burden during a busy period for managing agents.
Lloyd’s reflected on the discussions and has subsequently issued a follow-up email to DyGIST sponsors, with a more detailed guidance note on the recommended approach and assumptions, and also arranged a further market drop-in session to allow syndicates to raise any remaining questions. Lloyd’s explained that the additional information requested reflects the minimum information required by Lloyd’s to run the Lloyd’s Internal Model and assess the impact of the event on central and market solvency.
The LMA will continue to monitor feedback from managing agents and engage with Lloyd’s where additional clarification is needed.
The PRA’s qualitative template is primarily seeking to understand whether firms were able to demonstrate credible governance, decision-making and regulatory engagement under stress, rather than simply explaining their numerical results. Key areas of focus include evidence of strong governance and audit trail, credibility of management actions and business model implications, and readiness to engage with Lloyd’s and the PRA in a timely and transparent way under stress conditions.
Lloyd’s risk and governance oversight
In Q2, the CRO Committee also continued its engagement with Lloyd’s on market oversight, risk governance and the practical operation of Principle 10. Ross McGee, Lloyd’s newly appointed Director of Market Oversight Delivery, joined the May CRO Committee meeting to introduce his role and provide an update on the direction of Lloyd’s oversight delivery. Lloyd’s noted that the Principle 10 oversight team is expanding, with managers and senior associates being recruited to broaden coverage and add commercial market experience. Committee discussion focused on the need for Lloyd’s oversight to be pragmatic and flexible, avoid duplicate information requests, recognise the diverse structures and needs of managing agents, and avoid overburdening managing agents during busy periods.
Lloyd’s also described plans to provide more comprehensive market feedback, not only to Tier 1 agents, and to organise events to share findings and good practice. The committee raised questions around how sub-principles aggregate to top-level assessments and whether there would be greater transparency or changes in approach. Lloyd’s indicated that no immediate changes were planned, but that the team would seek market input before making any adjustments. This aligns with the LMA’s ongoing discussions with Lloyd’s Governance and Risk Oversight team to seek clarity on how Lloyd’s intends to use ORSA documents more effectively as a primary source of information, reduce duplicate requests where relevant information is already available, and clarify its forward approach to risk and governance oversight now that recruitment in this area has progressed.
Geopolitical risk
Geopolitical risk remained a key CRO Committee priority during Q2. The LMA CRO Committee arranged a briefing session with Control Risks in April, followed by a briefing note for members, LMA Control Risks Geopolitical Risk briefing, which summarised key themes and implications for Lloyd’s managing agent risk functions. Control risks framed the global geopolitical context as moving away from rules-based multilateralism towards more interest-driven, transactional and power-state behaviour, with established international institutions increasingly challenged and alternative structures emerging. Key themes included erosion of geopolitical norms, fragmentation of the global order, strategic competition over sovereignty, China’s positioning in alternative multilateralism and declining trust in institutions. For insurers, the note identified greater volatility and lower predictability at the international level.
Control Risks also emphasised organised crime as an increasingly important geopolitical risk channel, with geopolitical instability driving organised crime risk rather than those risks developing independently. A material increase in violent organised crime incidents affecting businesses, hybrid tactics spanning criminal, political and state-linked activity, and the use of sabotage, espionage and infrastructure disruption as part of criminal activity. Sectors identified as particularly exposed included electronic equipment, technology supply chains and pharmaceuticals, with corruption levels highlighted as an important early warning indicator.
CROs were encouraged to avoid the “normalisation trap”, namely the assumption that elevated crime, instability and disruption, are temporary anomalies rather than signs of a structurally higher risk environment. Control Risks emphasised the increasing plausibility of wildcard scenarios, the interaction of geopolitical, climate and technological shocks, second- and third-order effects across sectors, and the need for cross-scenario mapping, event triggers and escalation thresholds within enterprise risk and underwriting frameworks.
An LMA CRO Committee sub-group has come together in Q2 to develop a guide on assessing geopolitical risk. The guide aims to provide a practical geopolitical risk assessment framework and support embedding geopolitical risk into existing enterprise risk management (ERM) and ORSA processes. The intended framework includes pre-event taxonomy and key risk indicators, during-event playbooks for rapid exposure quantification and governance, and ORSA embedding through multi-year conflict scenarios and, where appropriate, reverse stress testing supported by clear board and management roles. The guide will be largely integrated within the Stress & Scenario Testing framework, currently produced by the LMA Risk Next Generation Committee – please refer to the section below.
Supply chain risk
CRO Committee members also supported London Risk Week through participation in a joint Lloyd’s Operational risk/LMA Operations roundtable on supply-chain risk. The discussion highlighted supply-chain disruption as an increasingly persistent driver of market volatility, with implications for inflation, business continuity and the resilience of critical sectors. Participants emphasised that supply-chain disruption should be viewed not only as an operational issue but as a structural, cross-cutting risk with longer-term consequences, including second- and third-order impacts that may not be fully captured in existing modelling approaches. The discussion also highlighted the need for earlier recognition of slow burn disruptions, stronger risk visibility across supply chains, and continued balance between resilience, underwriting discipline and the ability to capture opportunities in a more volatile environment.
Lloyd’s Q2 Market Message
The LMA also shared a summary of Lloyd’s Q2 Market Message with CROs, highlighting a shift towards a softening market environment and a renewed emphasis on underwriting discipline. Lloyd’s emphasised stronger focus on expense discipline, cycle management and portfolio optimisation, alongside greater scrutiny of assumptions underpinning loss ratios, inflation and capital setting.
Stress and scenario testing (SST)
Risk Next Generation Committee
The Risk Next Generation Committee’s stress and scenario testing workstream is approaching conclusion. The workstream is finalising a proposed framework intended to support risk functions with a practical approach to using stress and scenario tests to guide decision-making and provide insight to key stakeholders and decision-makers. The core message is as follows: stress and scenario tests are most effective when they connect risk insight to decisions around capital, underwriting, reinsurance and strategy. It will be presented at the CRO committee for approval in either July or September and will be then circulated to all CROs.
The proposed framework recognises that SSTs already have a number of established uses in regulatory and market practice, including capital and solvency assessment as part of ORSA, reverse stress testing, risk appetite and tolerance calibration, exposure management, reinsurance purchasing, pricing and underwriting challenge, liquidity and investment stresses, and model validation. The framework also asks how SSTs can be enhanced in the context of more dynamic and uncertain risks and therefore focuses on two case studies: geopolitical risk, due to elevated uncertainty and the growing importance of second-order impacts; and climate risk, due to PRA supervisory expectations and the increasing need to embed materiality assessments into business decision-making.
The draft framework proposes a taxonomy that starts with identification of risk themes, considers known and unknown risks, defines the purpose of the test, determines risk coverage, supports design and calibration and then focuses on the key “so what” question: what quantitative or qualitative outputs are produced, what management actions arise and how the exercise informs decision-making.
Risk culture and AI
The Risk Next Generation Committee has finalised risk culture guidance for managing agents, covering definitions, dimensions and challenges of measuring risk culture and linking risk culture to governance, decision-making and accountability. This will be presented to the July CRO Committee before wider circulation later in July.
AI and agentic AI also remain on the CRO Committee agenda following publication of the LMA’s AI Governance Framework, with AI liability risk identified as a key consideration for future committee discussions.
Risk talent and function benchmarking
Talent remains a key CRO Committee priority for 2026. Building on the Q1 update, the LMA is now preparing to launch a market-wide benchmarking survey of risk functions, in partnership with Teneo, to support a more structured and data-led understanding of how risk capabilities are evolving across the Lloyd’s market.
Enhanced underwriting and second line oversight
The May CRO Committee discussed the scope and approach for the project, which is intended to consider how managing agents’ risk management frameworks should evolve to support an effective and credible second line of defence for emerging or novel enhanced underwriting proposition risks. The committee discussed how enhanced underwriting models fit within ERM and risk management frameworks and agreed to engage an external party to deliver this project, with the CRO Committee and LMA remaining closely involved in shaping and overseeing delivery. Delivery will kick-off after the summer, most likely in September.
During Q2, the Climate Risk Working Group (CRWG) continued its focus on supporting managing agents with implementation of PRA SS5/25, with particular emphasis on gap analysis submissions and practical approaches to demonstrating compliance. At the June CRWG meeting, members shared their approaches to the gap analysis submissions, including sequencing of materiality assessments, development of internal roadmaps and action plans, and approaches to Board engagement. There was a clear divergence in sequencing, with some firms completing materiality assessments ahead of gap analysis, while others are using gap analysis as the starting point and embedding materiality as a first-stage deliverable.
Climate materiality assessment – survey results and emerging practice
In June, the CRWG shared the results of its market-wide climate materiality survey, providing a benchmark of current practices across managing agents. The survey findings indicate that the market is actively engaging with climate-related risk, with the strongest progress seen in physical risk assessment and in embedding climate considerations within existing governance and ERM frameworks.
A key structural theme is that firms are avoiding standalone climate frameworks and instead integrating climate-related risks as cross-cutting drivers within existing prudential risk categories. The Risk Function typically retains primary ownership of materiality assessments, with financial impact acting as the main lens, supported by a combination of quantitative thresholds and qualitative judgement.
The survey also highlights a clear maturity gap across risk types. Physical risk is relatively well developed, supported by established catastrophe modelling capabilities, whereas transition and litigation risks remain less mature due to data limitations and a lack of historical benchmarks. In these areas, firms are relying more heavily on qualitative approaches, sector screening and expert judgement to assess potential impact.
A further finding is that climate scenario analysis is widely undertaken but is not yet consistently viewed as decision-useful, particularly in the context of short-term business planning. The results indicate a structural challenge in translating long-term climate pathways into actionable insights for underwriting, capital and strategy decisions within typical planning horizons.
Overall, the survey reinforces that there is no single expected outcome on materiality. Rather, the focus is on ensuring that firms can demonstrate a clear, proportionate and well-governed approach to identifying climate-related risks, assessing potential materiality and escalating the outcomes into management and Board decision-making where appropriate.
If you have any questions, or did not receive the survey results, please contact Alex Koukoudis for a copy of the survey results.
Climate Scenario Analysis (CSA) – market initiative and next steps
Building on the Q1 focus on climate scenario analysis as a key deliverable, the CRWG formally launched a market-wide initiative in June to support managing agents in meeting PRA SS5/25 expectations. On 11 June, a webinar hosted by David Carlin and Alex Koukoudis introduced the initiative, setting out the objectives, PRA expectations and the role of CSA in supporting governance, decision-making and risk management processes.
The initiative is focused on developing a practical CSA playbook for the market, bringing together member perspectives on where scenario analysis is already informing underwriting, pricing, capital management and strategic decision-making, and where further progress is needed to enhance decision-usefulness. The webinar recording and slides are available here.
Climate risk workstream – continued focus areas
Alongside these activities, the CRWG continues to monitor broader areas of climate risk, including the interaction between climate risk and geopolitical developments, and is engaging with Lloyd’s and external stakeholders to understand future regulatory and supervisory developments.
Sustainability Committee repositioning and engagement with CUO Committee
Following the committee repositioning discussion highlighted in our Q1 update, the LMA Sustainability Committee has focused on translating its proposed direction into a more structured engagement with the LMA Chief Underwriting Officer Committee (CUOC). During Q2, the LMA Sustainability committee developed a discussion paper, which was presented to the CUOC to outline how sustainability considerations intersect with underwriting strategy and to propose areas for closer collaboration.
The CUOC discussion was supportive of this direction and confirmed that the Sustainability Committee should continue to operate as a standalone committee, while strengthening its engagement with the CUOC where there is clear underwriting relevance. There was strong interest in increasing collaboration on topics such as the intersection of AI and sustainability, especially in the context of emerging sustainability considerations linked to data centres, clients’ transition plans and the importance of sustainability-related data in underwriting decision-making.
The CUOC also welcomed the Sustainability Committee’s approach to engaging with brokers and other market participants, recognising the value of bringing together market perspectives to support more informed underwriting decisions.
Insurability and external market engagement
Throughout the first half of the year, the LMA’s Alex Koukoudis and Sustainability Committee members also supported the development of the ClimateWise Insurability Readiness Matrix (‘the Matrix’), contributing as part of the advisory group. The Matrix is designed as a structured diagnostic and engagement tool. It achieves this by evaluating insurability across seven critical components: Data and Modelling, Physical Resilience, Policy Alignment, Market Capital and Capacity, Stakeholder Awareness and Financial Literacy, Accessibility and Affordability, and Recovery Ecosystem.
It evaluates insurability by assigning each of its seven core components a traffic-light status. Crucially, these ratings are accompanied by a forward-looking trend signal, indicating whether the risk is improving, stable or declining, and specific “Pathways to Green” that map out the targeted interventions and key stakeholders required to restore or maintain coverage.
The primary users of the Matrix are insurers and reinsurers who draw on their underwriting knowledge and available data to complete the assessment. The aim of the matrix is to support a more consistent dialogue between insurers, clients and policymakers on resilience and adaptation.
Our involvement in the development of the ClimateWise insurability readiness matrix aligns closely with the LMA Sustainability Committee’s focus on insurability, protection gaps and long-term market sustainability, and provides a practical tool to support underwriting judgement and market-level discussion.
Finance, Actuarial and Exposure Management Update, Q2 2026
Paul Davenport
Finance and Risk Director
Welcome to our latest report on key activities and developments within the Finance, Actuarial and Exposure Management areas relevant to the market arising in the second quarter of 2026.
Finance
This quarter’s Finance Committee discussions and developments focused on the following items.
Engagement with Lloyd’s and market priorities
During Q2, the Finance Committee met in May and continued its engagement with Lloyd’s on reporting rationalisation, data provision to members’ agents and third-party capital providers and other market priorities. At the meeting, Lloyd’s new Chief Finance Officer, Jim Bichard, outlined his initial areas of focus, including maintaining Lloyd’s capital advantage, reinforcing underwriting discipline and improving the market’s attractiveness to capital providers. There was also a continued emphasis on leveraging technology to improve reporting processes and reduce manual effort across the market.
Committee discussion reinforced the importance of maintaining underwriting discipline and strong balance sheet credibility, particularly in the context of increased scrutiny from rating agencies and evolving market conditions. Members also highlighted the need for continued engagement between Lloyd’s and the Finance Committee to ensure that reporting and operational developments remain aligned with market priorities.
Reporting rationalisation, data and capital provider initiatives
The Committee received updates from Lloyd’s on the ongoing QMA Delta work. High levels of participation in QMA Delta workshops were noted, although Lloyd’s emphasised the importance of continued feedback from the market to support the refinement of reporting requirements. Lloyd’s has now sent managing agents syndicate-specific feedback on the tagging and we continue to press Lloyd’s to reduce the audit requirement before 2026 year end.
Lloyd’s initially expected managing agents to manage relationships with capital providers directly, but this has proved difficult in practice given the varied demands of different providers and the challenges for investors participating across multiple syndicates. Lloyd’s therefore agreed that a data standard, developed by the LMA, would serve to clarify the minimum data set that should be provided.
As such, the LMA is leading a workstream to define baseline data requirements for what managing agents with third party capital should provide to members agents’ and their capital providers. This work is aimed at improving transparency and consistency of information provided to capital providers, with early discussions highlighting the importance of clear income statement reporting by year of account and alignment of reserving bases. The output will be a data definition rather than a new reporting tool, to be published by end of July with further engagement planned to ensure proportionality and clarity of expectations.
PRA DyGIST – finance implications
Finance Committee members also reflected on the PRA DyGIST exercise, noting its value in testing governance, crisis response and cross-functional coordination. From a finance perspective, key areas of discussion included the challenges of forming assumptions around capital replenishment, particularly where third-party capital is involved, and the need to assess group-level financial resilience and liquidity under stress scenarios.
Members noted that the exercise highlighted the importance of clearly documenting assumptions and governance processes, with qualitative commentary forming an important part of the overall response.
Faster Claims Payments (FCP)
Updates were provided by LIMOSS on adoption and reconciliation challenges. There remain some concerns about the scalability of reconciliation processes although these have now mostly been addressed. “Follow Provisional” managing agents are blocking further adoption and a decision will need to be made in Q3 as to whether this option should be removed. The Finance Committee now has a role in FCP go/no-go decision making going forward.
Finance talent, skills and capability – survey findings
A central focus during Q2 has been the development and analysis of the Finance Committee’s market-wide survey on talent, skills and career progression. The survey provides a detailed evidence base on the pressures faced by finance functions across the Lloyd’s market and highlights both immediate operational challenges and longer-term structural themes.
The findings indicate that regulatory reporting remains the most acute pressure point, both in terms of sustained workload and recruitment difficulty. Finance teams are facing a multi-dimensional workload challenge, with reporting demands, transformation activity, business growth and cost pressures all contributing to increased strain on resources.
Beyond immediate capacity constraints, the survey highlights a broader structural challenge around talent development and workforce design. There is a clear gap in the mid-level talent pipeline, particularly at the point where technically strong specialists are expected to transition into broader leadership roles. At the same time, the market continues to rely heavily on a relatively narrow pool of candidates with Lloyd’s-specific experience, contributing to recruitment difficulty and upward pressure on salaries.
The survey also identifies a significant shift in the expected profile of finance professionals. Future capability requirements are expected to place greater emphasis on AI and automation, data and analytical skills, business engagement and communication, alongside maintaining core technical expertise. Many firms noted that current teams do not yet fully reflect this broader capability mix, particularly in areas such as digital fluency and commercial influence.
Importantly, the results indicate strong appetite for a more coordinated market response, with a majority of respondents willing to contribute to collective initiatives. Findings also point to demand for practical outputs, including benchmarking insights, skills frameworks and guidance on career development and operating model evolution. The full survey results will be reviewed by the Finance Committee in July and then circulated to the market.
Finance Next Generation committee and future capability focus
The Finance Next Generation Group continues to support the Finance Committee’s focus on talent and capability, with ongoing workstreams on talent pathways and increasing interest in the role of AI and technology within finance functions. Members discussed the potential to expand engagement with external experts and explore practical AI use cases to support process improvement and efficiency.
Treasury and Investments Group (TIG)
Asset Infrastructure Programme
The project continues on track, with tranche one integrations built and data onboarded. A trial run will be issued to participating managing agents for validation, while work continues on tranche two. Lloyd’s agreed to bring future market communications to TIG before wider circulation. A direct feed from Clearwater has been dropped on cost grounds, so additional feeds from asset manager/custodian systems are needed to realise full benefits. Lloyd’s will be providing a market briefing on 20 July.
Updates were also provided on Investment Café, including progress on contractual arrangements and user access. A revised data sharing agreement is being prepared, with draft wording shared with LMA legal representatives for review prior to broader circulation.
Future at Lloyd’s Membership & Underwriting Conditions and Requirements (M&URs)
Lloyd’s noted no expected changes to FAL M&URs this year. TIG discussed limitations around approved alternative asset funds. Lloyd’s noted that it is not currently possible to define a standard set of criteria and proposals continue to be considered on a case-by-case basis.
TIG reviewed market investment performance
Vesta presented an analysis of 2025 year-end data. The discussion highlighted reduced cash holdings as rates increased, broadly consistent credit quality across syndicate sizes and continuing dispersion in investment returns across the market. Further details can be found here.
LIC Reinsurance Collateral Deposit update
Initial May inflows were successful and future inflows expected during the year. Operational timelines were confirmed, including future settlement dates and reporting outputs.
Governance
The Lloyd’s Investment Committee has been changed to an executive committee although representation from managing agents will continue. A discussion was held on the role of the central fund within Lloyd’s wider capital strategy. Lloyd’s noted that this work is at an early stage and will be developed further in due course.
Actuarial
Lloyd’s 2026 business planning and Lloyd’s Capital Return (LCR) process
Lloyd’s confirmed that LCR instructions and Focus Areas materials have been published following review by an LMA working group. The business planning and capital process will again operate across three phases, with a two-week extension available for phase two submissions, where requested.
Planning and model loss ratios
CALM discussed market concerns around the relationship between planning loss ratios and model loss ratios. Lloyd’s clarified that the model loss ratio should be greater than or equal to the planned loss ratio, not necessarily strictly greater.
Partial Internal Models (PIMs)
Lloyd’s reiterated that the partial internal models pilot is continuing with three active participants. Managing agents interested in participating are encouraged to contact Lloyd’s.
DyGIST
The DyGIST exercise took place in May 2026 over a three-week period, with different scenarios brought together to happen around the same time. These scenarios were a north Atlantic hurricane, a Pacific northwest earthquake, a UK windstorm, a supply chain cyber attack and a global market downturn.
The positives noted by the market included:
Good preparation and engagement by everyone involved.
From a capital perspective, there was more resilience than anticipated across the market (though some firms were heavily impacted). There is a follow-on question here about how best the market could leverage our collective balance sheet.
Generally speaking, the open and transparent communications from the PRA and Lloyd’s, supported by regular LMA cross-market forums to assist on interpretation of scenario assumptions, was appreciated by the market.
Good lessons learned for most firms on internal governance, crisis response and cross-functional collaboration.
The areas to work on noted by the market included:
Timing and resourcing pressure; earlier notification from Lloyd’s on Syndicate Business Forecast (SBF) and LCR requirements, together with earlier clarity on the expected level of detail required for SBF and LCR, particularly at a time when SBF teams are prioritising the 2027 SBF and LCR.
Uncertainty on capital recalculation process, which necessitated follow-up communications from Lloyd’s (see FAQ documentation).
For some firms, not all, there was a perceived lack of proportionality in some of the templates requested by Lloyd’s and a view that the PRA request of non-Lloyd’s firms was more proportionate.
Exposure Management
DyGIST
See notes in the Actuarial section above.
Q3 reporting and data quality
Lloyd’s expects only limited changes to the model completeness questionnaire, RDL and LCM documentation. A small pilot data completeness and data quality return is planned, with submissions expected by the end of August.
Capital Planning Group (CPG)
Lloyd’s has completed 62 planning and oversight reviews in H1 2026 and will shift focus toward CPG in H2. For 2027 CPG, Lloyd’s will assess non-natural catastrophe expected maturity on both the current basis and the proposed updated basis. Lloyd’s intends to apply the same transitional approach that was used previously for natural catastrophe maturity, allowing additional time where change arises from growth or methodology updates.
Realistic Disaster Scenarios (RDS) framework
Work is also underway on a RDS framework to formalise the process for updating, replacing and where appropriate, sunsetting RDS requirements.
Exposure Management Working Group subgroup activity
Several subgroups are progressing, including Vendor engagement, Casualty data augmentation, Reporting efficiency and AI use cases. The Reporting subgroup will refresh its remit to focus more directly on operational pain points, market playback and proportionality.
The minutes of all committee meetings are available below (member login required).
An update from the LMA’s Claims Director, Janine Powell, to senior claims leaders and the claims community in the Lloyd’s market.
It has been a busy and productive start to 2026 for the LMA claims team, LMA Claims Committee (LMACC), advisory groups and class-specific claims communities. This roundup highlights the main developments, the actions that matter most and where members can get involved.
Key messages
Delegated authority remains a major focus, with the DA Claims Management Group (DACMG) agreeing a three-year strategic direction centred on data, oversight and cost management.
Talent development continues to gather pace, including the Claims Capability Framework, the Claims Ecosystem learning module and the upcoming publication of Talent Survey findings.
The Claims Operations Leadership Group (COLG) has delivered important operational progress, including the Chargeback Framework and informed the Gemini renewal.
Claims sector groups across the market have set priorities for the year, with a strong focus on education, emerging risks and greater collaboration.
Work is ongoing with the LMACC to establish strategic priorities, while the Complex Claims Group continues to support the market in response to the Iran conflict.
Delegated authority has already been a major area of activity this year. In January, Jenny Neale and I joined the 95th Loss Executives Association Annual Conference in Florida, where we spoke on the evolving nature of delegated authority partnerships. Since then, the DACMG has agreed a clear strategic plan to help the market address shared challenges.
Talent also remains a clear priority. In January, we ran drop-in sessions on the Claims Capability Framework and launched our first gamified learning module introducing new entrants to the Lloyd’s Claims Ecosystem. Thank you to everyone who completed the Talent Survey in late 2025. We will share the main findings and next steps shortly.
COLG has also had a busy start to the year, including publication of the Chargeback Framework and work on the Gemini expert fee management service renewal. More detail is included below.
Across our class-specific claims groups, members have identified their priority risks, opportunities and educational themes for 2026. We also brought chairs together to explore shared issues and opportunities for closer collaboration.
Alongside this, I shared my thoughts on the challenges and opportunities for the year ahead. Later this year I will also publish a progress update on the LMA Claims Strategic Plan, together with our goals for the next three years.
Thank you to everyone who joined the recent LMA Claims Briefing. The session covered DACMG and COLG updates, together with political violence and terrorism (PV&T) and cyber insights on the Iran conflict. We were also pleased to welcome Maximillian Hess of Enmetena Advisory, who shared valuable geopolitical insight for the insurance market. Slides from the briefing are available here, with additional information on cyber threats available through this link. The LMA claims calendar of events and forums is filling up quickly; the latest version is here.
Finally, thank you to all who responded to the Claims Core Data Record consultation. Your feedback has been invaluable in helping the Data Council progress work on a complete core data record to support FNOL, accounting, tax and regulatory requirements. Further updates will be shared in due course.
LMA Claims Strategy
Data – We will shortly launch market research to understand how claims data is being used today, where there is appetite for broader use, and whether there is support for a shared market resource built from anonymised pooled data. An initial focus group with Lloyd’s Claims Operations and six managing agents has already helped test early ideas. Broader market engagement will follow, and I would welcome input from anyone who would like to contribute.
Talent
Claims Capability Framework – Launched in December, this framework sets out the skills and experiences a claims adjuster should develop during their first two years in the London market. It is designed to support more consistent, high-quality foundational learning across the profession. We are encouraged that many managing agents have already begun implementing it in their organisations. More information is available on the LMA website.
Forage renewal – We are pleased to confirm that our partnership with Forage has been renewed for a further three years. This covers the existing claims adjuster and operations job simulations as well as the development of new programmes for operations and underwriting.
Claims Ecosystem launch – In January, the LMA Academy launched a new learning experience that gives participants a practical, end-to-end view of the claims journey across the market ecosystem. Built with input from market practitioners and delivered through a gamified format, it offers an accessible way for new entrants to build knowledge through realistic examples. LMA members can find out more and register here.
Complex Claims Group Response to Iran conflict
Following the outbreak of the US/Israel and Iran conflict at the end of February, the Complex Claims Group was mobilised. The group brings together chairs and representatives from all claims sector groups and is chaired by Liz O’Connell, as LMACC representative, and Sebastian Rolf. CAT codes 26AA/AB were introduced, with supporting guidance, and regular situation briefings continue with support from external partners including McKenzie Intelligence Services (MIS), Lloyd’s List Intelligence and Enmetena Advisory. Additional ad hoc meetings have also been arranged for the PV&T Claims Group.
Claims Operations Leadership Group
Chargeback framework – COLG was asked by LMACC to review how claims management technology solution fees are apportioned across binder and individual claims, and to develop a framework that brings greater transparency and consistency. The first version was published in March 2026 and shared at both the Claims Operations Forum and the April Claims Briefing. The framework is available here: LMA – Chargeback Framework and Register.
Gemini renewal – Gemini, the expert fee payment solution used by more than 40 managing agents, has been renewed for a further three years. The service now processes more than 5,000 invoices each month. Its maturity as a market service has supported a shift in the funding model: the fixed licence fee for the new term has more than halved, while the transaction fee has increased modestly from £20 to £27.50, moving the service more clearly to a user pays model preferred by the consulted groups, including LMACC.
FCP update – A quarter of the way into the new three-year contract with Vitesse, the priority has been helping managing agents move from Provisional to Advanced status. This is achieved by demonstrating an automated end-to-end reconciliation process, whether delivered internally or through a third-party provider, that reduces manual intervention for leaders and followers.
CYGNVS proof of concept moving to pilot – In late 2025, with support from Lloyd’s Lab and several managing agents, a proof of concept with CYGNVS concluded successfully. The work tested whether the platform, designed to support secure collaboration during outages and breaches, could also be used as a secure claims collaboration environment for carriers, experts, brokers and clients. The next stage is a limited pilot with QBE and Beazley on singleton claims. Their experience will help determine whether the pilot should later be extended to subscription claims.
Delegated Authority Claims Management Group
The DACMG has had a busy start to 2026, holding dedicated forums for managing agents and for delegated claims administrators (DCAs) to share and test its vision for delegated claims in the market. That vision is supported by three strategic priorities for the next three years: improving data, streamlining oversight and strengthening cost management. The DA Claims Management Strategy was also presented at the Claims Briefing and is included here.
A notable early success has been DACMG’s work to ensure claims is included within the scope of the LIMOSS-led, LMA-supported project to procure a central market onboarding system for coverholders and DCAs. The scope now also includes requirements for ingesting and reporting data that supports ongoing DCA performance oversight. LIMOSS has completed the RFI stage and expects to move to RFP once business requirements are finalised.
NexGen Claims Leadership Group
NexGen will continue to focus strongly on talent development in 2026. Working with the LMA, the group will help extend the Claims Capability Framework for senior adjusters while also exploring ways to strengthen leadership capability among mid-career claims professionals.
In Q2, NexGen will publish two educational pieces: one on the Lloyd’s Principles and their relevance to day-to-day claims handling, and one building on last year’s Artificial Intelligence (AI) in Claims research to explore the implications for the future of claims.
Emerging Professionals Claims Community (EPCC)
The EPCC will focus this year on networking, professional soft skills and further development of the 101 class-of-business series. The EPCC will host its first Spring Quiz on 27 May; there are still places available so do encourage your teams to come along. In June, in collaboration with the EPCC, Norton Rose Fulbright will run a mock exercise to give emerging professionals practical hands-on training. LMA, IUA and LIIBA emerging professional communities will collaborate on more events this year with a cross-market event planned for later in the year.
Technical Claims Groups
Property Insurance Claims Group – PICG has been restructured for 2026 to better reflect the needs of the property claims community across territories and distribution channels. The revised model includes a PICG ExCo with elected and appointed members, alongside five subcommittees covering US D&F, Binders, International, L&D/Talent and the PICG Conference. The recent PICG Conference focused on lessons learned from major catastrophes.
Reinsurance Claims Group – Following last year’s inaugural ReConnect conference, this year’s event will take place on 15 June at the WTW Auditorium. The agenda spans topics from data centres to horizon scanning in casualty classes. Full details and registration are available here: ReConnect 2026: LMA Reinsurance Claims Conference – LMA.
Financial Lines Claims Group and Professional Lines Claims Group – The FinPro Claims Group held its symposium in February before the wider group was restructured. Discussions covered the impact of AI developments, geopolitical change and US tariff policy on D&O and wider FinPro exposures; alongside growing defence costs, disclosure risk, claim frequency and emerging plaintiff theories.
The creation of separate Financial Lines and Professional Lines Claims Groups earlier this year should allow for more focused collaboration across this important area of the market.
Financial Lines priorities will focus on AI, geopolitical issues and private credit amongst others with the Professional Lines Claims Group focusing on cladding and the increasing prevalence of nuclear verdicts to name a few.
Cyber Claims Group – The Cyber Claims Forum with MDD in March once again attracted a full audience. Discussions focused on cyber property damage, including the increasing involvement of CZ policies, and on UK/EU claims practices, with attention to cultural and regulatory considerations.
The Cyber Vendor Secondment Programme concluded in April after six months, giving developing cyber claims professionals deeper insight into ransomware response through sessions with vendors including breach counsel and public relations specialists. Thank you to all who took part.
The Group’s priorities for this year will focus on education for the market, supply chain risk, regulatory risk both in the UK and abroad and cyber catastrophes amongst others.
General Liability Claims Group – Current areas of focus include social media addiction, ultra-processed food, PFAS and other environmental issues, nuclear verdicts, and third-party litigation funding. Seminars on several of these topics are planned.
Political Violence & Terrorism Claims Group – The group has been focused on the US/Israel and Iran conflict, including a series of ad hoc meetings. Alongside immediate market issues, it is also setting priorities for the year, with continued attention on sanctions compliance and wider geopolitical conflict.
Political Risk Claims Group – The group plans to strengthen learning and development opportunities for emerging and intermediate professionals, reflecting the importance of building the future talent pipeline. Sanctions, rising defaults in sub-Saharan countries and the ongoing Middle East conflict are expected to remain key topics.
Joint Renewable Energy Claims Group (JRECG) – In its second year, JRECG worked with Steege XP to arrange a site visit to ORE Catapult in Blyth. Members gained insight into leading renewable energy research and on the approaches designed to accelerate product development and reduce risk across the sector. Its priorities this year are focused on climate-related issues and wordings discrepancies to name a few.
Joint Claims Energy and Joint Marine, Cargo Claims Groups – Primary focus this year has been the conflict in the Middle East, with the Joint Hull subgroup separately researching and compiling material on the impact of inflation on hull losses.
LMA Claims Academy
During Q1, the LMA Academy launched the new gamified Claims Ecosystem training module in collaboration with Attensi and Velonetic. A licence provides unlimited access for a year to a range of interactive online modules and can be purchased by contacting the LMA Academy team at apply@lmalloyds.com.
Claims Operations Management programme – This three-day intermediate programme, designed for those responsible for operational claims delivery, starts on 28 May and a few places are still available. To register, please contact the LMA Academy team at apply@lmalloyds.com.
The annual LMA Academy Syndicate Business Planning (SBP) programme also ran across Q1 and Q2, with a dedicated claims module delivered on 30 April.
Looking ahead – Communications for the annual Claims Foundation Programme and Claims Management Programme will be issued in June ahead of a September start. Registrations can already be made via the LMA Virtual Academy.
Contact the LMA Claims team
If you would like to get involved or find out more, please contact the LMA Claims team at lmaclaimsteam@lmalloyds.com, or access information on the LMA website. Key contacts are listed below by area of focus.
