Welcome to our latest report on key activities and developments within the Risk and Sustainability areas relevant to the market arising in the first quarter of 2026.

Risk

CRO Committee priorities and CROs survey feedback: In Q1, the CRO Committee ran a membership survey to initiate a market-wide invitation for CROs to express interest to join the CRO Committee and gather key information, to ensure the committee remains representative of the whole market. Feedback reviewed highlighted that the committee’s most valued outputs relate to effective lobbying of Lloyd’s and regulators, peer discussion and networking forums, and production of practical guidance. The most frequently mentioned risk topics for 2026 include geopolitical and macroeconomic risks, AI and technology governance, climate risk and regulatory change. Aligned with the committee discussions in Q4 and the survey results, committee members agreed on the following deliverables:

• Develop a risk practitioners’ guide to help risk functions with second line oversight of the new ‘enhanced underwriting’ methods.
• Geopolitical risk: A dedicated subgroup has been formed to examine and share members’ approaches on assessing geopolitical risk.
• Stress and scenario testing (SST): Develop guidance on how SST can be used for board decision making, including potential use as a playbook with identified management action. 
• Talent: A survey will be circulated in April to identify demographics of the CRO function, how the function interacts with other assurance functions and where talent pain points are located. This will be followed by playback to the market and networking events, with an opportunity for mentoring by CROs.
• LMA risk radar: The CRO committee will provide support and guidance to the LMA effort to provide a view of the risks emerging from and concerning all LMA committees and teams.

Lloyd’s Market Oversight: Lloyd’s executives joined the committee meetings to provide insights on the priorities of the 2026 Market Oversight Plan as well as to address additional topics, including forthcoming actions related to the PRA and Lloyd’s co-operation agreement, the PRA’s Dynamic General Insurance Stress Test (DyGIST) and the changes within Lloyd’s oversight, including the new Market Oversight Manager role. The CRO Committee raised the issue of consistency across Lloyd’s various oversight teams around outcomes-based oversight and a uniform Lloyd’s PBO approach. Lloyd’s acknowledged the issue and agreed to continue challenging oversight teams to be clear around the risk being assessed, define expected outcomes and focus judgement on outcomes. For example, Lloyd’s intends to make better use of ORSA submissions as a primary source of information, with the Principle 10 team being tasked to review and share insights across oversight teams, aiming to reduce duplicate requests.

PRA’s DyGIST exercise: On 24 February, Lloyd’s and the PRA hosted an event for DyGIST sponsors to present expectations and approach to be followed in May. This was followed by a presentation to the LMA CRO committee. From a CRO/risk function perspective, the emphasis is on real‑time decision making under uncertainty, the quality of internal coordination and governance, and the credibility of assumptions and management actions taken as the scenario evolves. In advance of the live exercise the LMA has arranged cross‑functional drop-in sessions, bringing together risk and other functional experts to discuss preparedness steps, surface concerns or questions for Lloyd’s, and agree the approach on how the LMA can best support our members during the event. The event links to register are as follows:

• Session 1: 20 April 9:00
• Session 2: 23 April 10:00
• Session 3: 29 April 16:00

Geopolitical risk: A sub-group of the CRO Committee is currently working on a geopolitical risk assessment framework which will be circulated to all CROs ahead of the kick-off of 2027 business planning discussions with Lloyd’s. To support risk leaders in navigating the geopolitical risk landscape, the LMA organised a briefing session hosted by Control Risks on 15 April.

Risk culture: The Risk Next Gen group is finalising a risk culture assessment framework which will be presented to the CRO Committee in May and subsequently circulated to all CROs.

AI risk management: Having worked with Barnett Waddingham on an AI risk management survey and an AI adoption toolkit, we brought together Chief Risk Officers, Chief Actuaries and other senior professionals responsible for risk and actuarial oversight. The event, held on 16 April, introduced two new LMA reports: findings from a market survey on AI risk management and an upcoming walkthrough of an AI adoption toolkit, due to be published 23 April. 

The LMA continues to provide periodic updates to the LMA Legal & Regulatory Radar.

Sustainability and Climate Risk

Underwriting the Transition: On 03 March, in collaboration with KPMG, we released the second edition of the Underwriting the Transition report. This second edition reveals a fundamental shift from last year’s transition assumptions. The average increase in global temperatures has now exceeded 1.5°C and the consensus following COP30 in Belém is that the risk of a “disorderly transition” has heightened. The insurance market is now navigating a dual challenge: intensifying physical risks and an evolving transition risk profile. This includes, for example, the PRA mandating that climate risks (including climate litigation risk) should be embedded into governance and risk appetites before June 2026.

PRA SS5/25 and dialogue with the PRA: During Q1, the Climate Risk Working Group continued to focus extensively on PRA SS5/25 and related supervisory expectations. In February, the group was joined by the PRA climate supervision team as part of structured engagement between the LMA Climate Risk Working Group and the PRA. The PRA team outlined next steps on SS5/25 and engaged directly with market climate risk practitioners, responding to questions on proportionality, climate scenario analysis, governance arrangements, and effective challenge at board and senior management level. This session provided an opportunity for open dialogue on how supervisory expectations are evolving and how firms can demonstrate alignment in a proportionate and practical manner.

Climate-related risk materiality assessment framework: Materiality assessment was agreed by the LMA Climate Risk Working Group (CRWG) as one of its key deliverables for 2026. Members discussed the need for robust, yet proportionate materiality assessment frameworks aligned to SS5/25, including governance involvement, definitions and thresholds for materiality, and treatment of physical, transition and litigation risks. To support this, the CRWG has developed a materiality assessment survey, which can be accessed here: LMA CRWG: Climate-related risk Materiality Framework Survey – Fill in form. The survey is designed to capture current market practices and will inform the development of a materiality assessment framework for market practitioners, intended to support firms at different stages of maturity and with differing risk appetites.

Climate scenario analysis: Climate scenario analysis was also agreed as a key deliverable for the LMA CRWG. Q1 discussions focused on the purpose and application of scenario analysis, including the balance between regulatory compliance and strategic value, the use of short‑term versus medium‑term horizons, and the relative role of quantitative and qualitative approaches. Members highlighted challenges in producing decision‑useful outputs for boards and discussed the potential development of short‑term scenario playbooks, including the use of sectoral pathways from the Underwriting the Transition report as a practical approach. The group also discussed the role of external expertise, particularly in supporting scenario design and board‑level communication. In the meantime, the group is currently liaising with Lloyd’s Risk team to collaborate on the Corporation’s efforts to meet the PRA’s climate scenario expectations and avoid any duplication.

Climate-related litigation risk: Climate‑related litigation risk remained on the CRWG agenda. Members revisited challenges associated with quantification, particularly for casualty business, and discussed the role of claims coding initiatives and the need for greater clarity on Lloyd’s aggregate‑level requirements.

Sustainability reporting and disclosures’ landscape: LMA organised a dedicated session with the Deloitte Sustainability team for sustainability reporting professionals from the market. The session, held on 24 March, provided an overview of the current sustainability disclosures landscape, covering developments in the UK, Europe and other jurisdictions, and explored how different reporting regimes are evolving and interacting. The session was positioned as an educational and horizon‑scanning discussion to support firms navigating an increasingly complex disclosures environment. The session was recorded, and a link will be shared on the LMA risk webpage in due course.

Repositioning of the Sustainability Committee in light of market and economic context: During Q1, the Sustainability Committee held a dedicated strategic discussion on the future purpose and positioning of the committee, reflecting a shift in the general economic sentiment and evolving market priorities. Members noted that when the committee was originally established, sustainability activity across the market was strongly shaped by regulatory direction and a clearly defined Lloyd’s sustainability function. This context has since changed and members discussed how the committee can continue to provide value to the market in this changed environment. There was strong consensus that the committee continues to provide a valued forum for sharing best practice, peer discussion and collective thinking, and that there is an opportunity to sharpen its impact by aligning more closely with underwriting‑led priorities. The committee will therefore orient its outputs towards the LMA Chief Underwriting Officer (CUO) Committee, rather than operating primarily as a standalone forum. As a result, it is likely that the focus of the committee will turn to:

• Insurability, including consideration of protection gaps and how sustainability and climate‑related dynamics affect existing or new product design as well as the long‑term insurability of risks.
• Adaptation and resilience, particularly in relation to how underwriting and product design can support resilience outcomes.
• The intersection of AI and sustainability, viewed through both commercial and operational lenses, including how new technologies may support sustainability‑related objectives.

The minutes of all committee meetings are available below (member login required).

• Chief Risk Officers’ Committee
• Risk Next Generation Committee
• Sustainability Committee
• Climate Risk Working Group

Please get in touch to find out more or if you have queries on the matters in this update or in the minutes.

Paul Davenport
Finance and Risk Director
paul.davenport@lmalloyds.com

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 first quarter of 2026.

Finance

This quarter’s Finance Committee discussions and developments focused on the following items.

Reporting, data and year‑end processes: Year‑end reporting was completed with the first fully tagged set of financial statements. The Lloyd’s 2026 Insights Report on the results is now available here. Initial feedback on the process highlighted tight deadlines and cost for tagging and audit sign-offs as issues. There is a disparity between market experience and Lloyd’s perception of tagging quality, so some structured assessment is needed once all year-end reporting is complete.

Reporting simplification and QMA Delta: Lloyd’s held the project relaunch event for QMA Delta on 05 March. There are now two workstreams: a Lloyd’s‑led stream focused on refining QMA Delta data collection, and an LMA‑led stream to define a baseline data set and reporting cadence for managing agents with external capital.

Lloyd’s budget, costs and the 1% charge: Lloyd’s presented the Corporation’s 2026 budget at the most recent committee meeting which represents a reduction in both Corporation income and expenses relative to 2025. Members raised concerns about the transparency and predictability of the 1% charge and rebate mechanism and this issue will be picked up with the new Lloyd’s CFO.

USD reporting: The committee discussed the potential implications of Lloyd’s considering a move to US dollar reporting and an initial discussion paper has been prepared to identify all the implications across market processes. Email paul.davenport@lmalloyds.com to obtain a copy.

Faster Claims Payments (FCP): Updates were provided by LIMOSS on FCP adoption, reconciliation challenges and market engagement. The committee noted uneven adoption across managing agents, ongoing reconciliation issues and broker engagement as key blockers. The Finance Committee now has a formal role in FCP governance and decision making going forward.

Finance functions and talent: The Finance Committee has very recently issued a data collection exercise from all finance functions to understand the specific recruitment and talent challenges, play this back to the market and determine specific actions to support finance functions in skills development and career pathways. The request is split into two parts, for completion by Friday 24 April 2026.

1. Part A: Strategic Insights (Microsoft Forms). This 10-minute digital survey captures your qualitative views on recruitment challenges, skill gaps and capacity pressures, including highlighting skills and capabilities needed for the next five years. Fill in the Finance Functions Survey.
2. Part B: Finance function headcount data (Excel spreadsheet). This spreadsheet aims to capture data by functional area and experience bracket. Data provided will not be shared with other managing agents but will be used to prepare an aggregated benchmark for play back to the market. Download the spreadsheet.

Treasury and Investments Group (TIG)

LIC funding model: LIC updated the LMA TIG working group, confirming that the reinsurance treaty had been signed by all managing agents, the deposit investment strategy and quarterly adjustments timeline. Systems and operations processes were confirmed to be ready to manage the Reinsurance Collateral Deposit (RCD) collection for the first time in April 2026.

Asset infrastructure: Lloyd’s confirmed AAD returns are no longer required, QAD remaining until end Q3 2026. Lloyd’s noted operating model conflicts and commercial constraints meant that a direct connection will not be built with Clearwater. Instead Lloyd’s will draw data directly from custodians or investment managers systems. Lloyd’s provided a comprehensive update on this change of approach at its townhall event on Wednesday 15 April.

Strategic asset allocation requirements: Lloyd’s clarified that up to 10% of FAL may be invested in pre‑approved illiquid funds.

Actuarial

Committee updates: We welcome Meera Rajoo-Oakley (Antares) and Ben Carter (Asta) as the new Committee of Actuaries in the Lloyd’s Market (CALM) chair and deputy chair respectively. Many thanks to outgoing chairs Lydia Rhodes (Dale) and Laura McMaster (Asta) for their work.

Capital Planning Group process: The survey feedback and proposed improvements were discussed, with Lloyd’s outlining planned changes focused on improved timeliness and transparency of communication, clearer triage and materiality of feedback with more structured interim engagement for model changes. Details will be shared at Lloyd’s capital briefing on Monday 20 April. The feedback also highlighted a need for further education on use of the member modeler, in particular awareness of its limitations when being used to provide an early view of capital.

Reserve Benchmarking: Lloyd’s presented the updated pack, outlining enhanced methodology, improved comparability and new interactive features, with continued refinement based on market feedback. The first formal publication of the benchmark to the market is planned for June 2026.

Partial Internal Models (PIM): Lloyd’s provided an update on the PIM pilot to a CALM working group, outlining a draft framework and guidance for syndicates wanting to adopt a PIM. All syndicates have been invited to engage and express interest in participating in the pilot for the setting of 2027 SCR.

Major loss event: A CALM working group has been established to consider capital and recapitalisation following a major loss event, focusing on pragmatic approaches to post‑event capital assessment, sequencing of recapitalisation and business planning. This will include use of simplified submissions and management actions, and alignment with Lloyd’s central fund and regulatory expectations.

AI Working Group: The group provided an update on emerging AI use cases for actuarial functions, including potential productivity gains in coding, reporting and data analysis (notably within Excel), with further work planned to develop and share practical, governance‑aware use cases with the committee and the actuarial community in the market. The LMA has organised an event with Barnett Waddingham on 16 April 2026 at 15.45: AI Risk and Governance: Market Insights and Practical Application.

DyGIST planning and delivery: This remains a regular area of discussion, with Lloyd’s setting out the structure and timetable of the exercise. A number of LMA drop-in sessions have been set up in April with all chief actuaries invited. The event links to register are as follows:

• Session 1: 20 April 09.00
• Session 2: 23 April 10.00
• Session 3: 29 April 16.00

Major model change process: Syndicates are required to update their model change policies by September 2026 as part of Solvency UK. Details have been shared in the Lloyd’s January 2026 actuarial oversight update.

Exposure management

Committee updates: Following a full committee refresh, we welcome Vanessa Jones (Dale) and David Singh (Beazley) as the new Exposure Management Working Group (EMWG) chair and deputy chair respectively. Many thanks to the outgoing chair Laura Freeman (Apollo) for her work.

RDS: Draft new cyber, credit and political risk RDSs have been produced with the support of exposure management and underwriting groups. Draft Lloyd’s returns based on these are expected to be issued in the coming months.

LMA Oasis Insight Conference 2026: This will take place on 28-29 April 2026.

Exposure Management oversight priorities: 2026 oversight will focus on data quality and completeness. Lloyd’s noted an increased number of recent reviews due to changes in maturity levels and for new syndicates. The team’s work will be supported by clearer guidance and improved consolidated market communication.

DyGIST planning and delivery: This remains a key area of discussion, with Lloyd’s setting out the structure and timetable of the exercise. See details of LMA drop-in sessions in the Actuarial section above.

EMWG sub‑groups: Groups are currently focused on model evaluation, coordinated vendor engagement, reporting efficiency, AI use cases, actuarial–exposure management collaboration, and casualty, with members invited to participate across workstreams.

The minutes of all committee meetings are available below (member login required).

• Finance Committee
• Chief Actuaries in the Lloyd’s Market Committee (CALM)
• Treasury and Investment Group
• Exposure Management Working Group
• Third Party Capital Committee

Please get in touch to find out more or if you have queries on the matters in this update or in the minutes.

Paul Davenport
Finance and Risk Director
paul.davenport@lmalloyds.com

An update from the LMA’s CEO, Sheila Cameron, to managing and members’ agent CEOs.

1. Overview

Q1 was dominated by the situation in the Middle East, the Lloyd’s 2025 results and the launch of the Lloyd’s five-year strategy. The LMA also launched its role of the leader report and its underwriting the transition report during Q1. Updates on all of these matters are provided below.

2. Primary areas of market focus during Q1 2026

2025 full year results

	2023	2024	2025
GWP	£52.1bn	£55.5bn	£57.9bn
COR	84.0%	86.9%	87.6%
Underwriting result	£5.9bn	£5.3bn	£5.2bn
Profit before tax	£10.7bn	£9.6bn	£10.6bn
Investment result	£5.3bn	£4.9bn	£6.0bn
Attritional loss ratio	48.3%	47.1%	47.9%
Major claims ratio	3.5%	7.8%	5.8%
Expense ratio	34.4%	34.4%	35.6%
Admin cost ratio *	9.1%	9.0%	9.5%
Acquisition cost ratio *	25.4%	25.4%	26.1%
Prior year releases	(2.2%)	(2.4%)	(1.7)%
Price movement	7.2%	0.3%	(3.7)%
FX impact	0.1%	(2.3%)	(2.4)%
Volume growth	4.3%	8.5%	10.3%
Capital	£45.3bn	£47.1bn	£49.8bn
Return on capital	25.3%	21.0%	22.0%
Return on investment	5.4%	4.7%	5.6%
Central solvency ratio	503%	435%	496%
Market solvency ratio	207%	205%	200%

* Note that the 2023 and 2024 admin and acquisition cost ratios were restated for 2023 and 2024 in the Lloyd’s accounts.

While overall a strong result, commentary has drawn attention to:

• The shift in the acquisition cost ratio, driven by higher profit commissions (including prior year catch ups) and the increased costs associated with new business.
• GWP volume growth was up 10.3%, made up of 7.2% from existing participants and 3.1% from new entrants.
• Californian wildfires accounted for £1.6bn of the £2.4bn total major claims figure.
• The 2025 major claims figure of 5.8% compares to a ten-year average of 10.4% and a five-year average of 7.8%.

High-level class performance was as follows (noting that casualty now has a larger market share than property):

	2025 market share %		2024 GWP	2025 GWP		2024 COR	2025 COR
Reinsurance	34.7%		£18.7bn	£20.1bn		87.6%	85.6%
Property	22.5%		£15.9bn	£13.0bn		81.6%	75.4%
Casualty	25.4%		£13.4bn	£14.7bn		90.8%	100.8%
Marine, Aviation & Energy	11.7%		£6.4bn	£6.8bn		99.2%	103.5%
Specialty	5.7%		£3.5bn	£3.3bn		78.6%	86.6%

Finally, the annual report also looked at the principal risks and the high-priority emerging risks facing Lloyd’s: 

Principal risks	High-priority emerging risks
Sustainable market performance	Climate change
Geopolitical/macroeconomic/climate volatility	Technology and AI
Technology and AI competitiveness	Geopolitical and macroeconomic interdependencies
Capital sufficiency	Regulatory
Strategy and change delivery	Insurance talent
Operational resilience
Regulatory and licenses

For the third year running, the LMA will publish in mid-April its analysis of syndicate results, in conjunction with ICMR. The report will cover the overall performance of the market and conducts a detailed examination of individual syndicate performance. It explores the factors driving growth and profitability across syndicates and analyses the key risk-return profiles with Lloyd’s major classes of business.

Lloyd’s strategy:

Together with its 2025 results, Lloyd’s also announced its new purpose (“we bring together the world’s leading risk takers to advance global progress”) and strategy. The five-year strategy has four pillars:

• Leading underwriting performance (sub 95% COR through a ten-year cycle).
• Efficient and flexible marketplace (no more than 1% cost to operate at Lloyd’s).
• Maximised capital advantage (RoC above 12% over the cycle).
• A Lloyd’s to be proud of (excellent culture; cost to income ratio of sub 80%; top tier net promoter score).

The LMA welcomes the publication of the strategy, considering it to be a welcome focus on the fundamentals of Lloyd’s. Notable points we particularly welcomed included:

• The number one focus being on underwriting performance through the cycle.
• Reinvigorating the Lloyd’s capital narrative and process.
• Defining managing agents as customers.
• A tighter correlation between oversight and risk, including a reconsideration of the original Lloyd’s intent in respect of the outperforming status.
• Completing the back-office re-platform in a phased and controlled manner.
• A doubling of early talent recruitment.

In due course, we look forward to understanding further detail on the implementation plan. We also encourage Lloyd’s to strongly focus on clear articulation of its data strategy and the implications of same for managing agents.

Q1 market message:

Rachel Turk’s Q1 market message largely focused on rate adequacy, as shown by the graph below. Reviews of adequacy in property and casualty were also shared during the presentation and are available here. 

In terms of oversight, Lloyd’s also announced that the changes to outperforming status have been paused pending the new Lloyd’s strategy and its desire for a clearer link between oversight and risk.

Reference was also made to the Dynamic General Insurance Stress Test (DyGIST) during the presentation, with a request for CEO-level sponsorship for those firms who have been selected to take part.

Geopolitical matters:

The situation in the Middle East has led to considerable activity, particularly in our war, marine and aviation committees. The Joint War Committee met to extend restricted areas following advice from Herminius (LMA security advisrs). A heads of sector claims group has also been established and a cat code has been issued as well.

The LMA provided the Joint Liability Committee with a template notice of cancellation, and the aviation market was supported by the LMA issuing notice to the brokers that underwriters considered resumption of flights after reopening of air space to be a material change that needed to be notified to underwriters. Leaders were also reminded by the LMA of their obligations to followers in terms of ensuring that the brokers pass information to the followers.

The LMA has commenced a legal analysis of issues arising out of the Middle East crisis, including:

• Grip of the peril implications.
• Press reaction to the standard issuance of notices of cancellation and whether there might be an alternative approach to this for the future, including a possible change to nomenclature.
• Definition of war.
• Implications of the UAE government’s categorisation of the current crisis as sabotage/terrorist action.
• Sanctions implications in terms of the oil price cap.
• Difference between direct and indirect causes.

The LMA has also undertaken significant press and media work around this topic, contributing to over 50 media reports/interviews, including Sky News, BBC, the FT, the Wall Street Journal and Reuters, together with all of the trade press. To support this PR work, we also carried out various surveys of our marine and aviation war committees to provide additional market insight.

Separate to the Middle East situation, the LMA, under the auspices of the CUO Committee, has continued its work around the definition of war in the context of automatic termination under the five powers 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.

Role of the leader report:

In February, the LMA launched its role of the leader report, which is available here. This report follows on from our previous report, which explored the evolution and future of follow models in the market. This new report introduces a six-segment categorisation of leaders and followers from “full-service leaders” to “capacity followers,” with all six models being valid business strategies. The report also includes a series of questions that firms can use to determine where their teams sit today within these segments and what therefore they might need to do in order to move into different segments, should they wish to do so.

Underwriting the transition report:

In March, the LMA and KPMG launched their underwriting the transition report, which is available here (login required). The report provides an updated viewpoint across the transition sectors that are also key to Lloyd’s underwriters. In doing so, it provides deeper insights into the implications for underwriters, both in terms of opportunities and risks arising from the transition.

LMG London Matters report:

The LMG published the latest version of its London Matters report in February, available here. Talent shortages were highlighted as critical, particularly for the under 30s, whose share of the total workforce is predicted to fall from 24% to 7% over the next ten years.

Lloyd’s Insurance Company (LIC), Belgium:

The EU has decided not to proceed with its Retail Investment Strategy (RIS) plans to change the third country branch model that was put in place by most brokers to deal with Brexit. This has been deferred to be considered as part of the consideration of the Intermediary Distribution Directive (IDD), which will not now be dealt with before 2029. This means that there is no current challenge to the distribution methods being used to underwrite EU business in London.

Operations and technology, including PPL and LMG’s Data Council:  

As part of the Lloyd’s strategy announcement, the Velonetic re-platforming brand was retired. However, the re-platform of the Velonetic back office will continue, albeit with a changed approach likely to focus on a phased delivery rather than a big bang approach. More details to follow from Velonetic during Q2.

The LMG’s Data Council completed the claims Core Data Record (CDR) in Q1 and will launch the delegated authority CDR in late Q2.

Cultural and training matters:

The results of the market policies and procedures (MP&P) data collection exercise were shared with market HRDs during March. Some key highlights include:

• The total headcount figure across the market is 61,124, a slight decrease on 2025.
• The proportion of women in leadership continues to trend upwards, in particular: women in leadership is at 38%, an increase of 2pp from last year, which places managing agents in the second quartile for women in leadership, compared to other firms in the market.
• Female representation by leadership level has increased with board at 30% (an increase of 2pp), executive committees at 32% (an increase of 1pp) and direct reports of executive committees at 39% (an increase of 1pp).
• 18% of the workforce has an ethnically diverse background, a decrease of 1pp from last year and compared with 16% across the market. However, ethnically diverse representation in leadership has increased by 1pp to 13%, compared with 12% across the market. 22% of new hires had an ethnically diverse background, a decrease of 1pp from last year.

Finally, a new talent infographic is now available on the LMA website. The document provides an overview of the various talent initiatives offered by each market body/association, with links to explore further. It also sets out who delivers what across early talent attraction, and technical and non-technical training. The matrix highlights initiatives available to those who work both within and outside of the Lloyd’s and London (re)insurance market.

Notable people changes at Lloyd’s, FCA, PRA and the LMA:  

Sean McGovern and Fiona Luck were appointed deputy chairs of Lloyd’s, joining Vicky Carter. Fiona Luck was also appointed as the Senior Independent Director, succeeding Lord Mark Sedwill, who has left the Council of Lloyd’s.

Jim Bichard will join Lloyd’s as CFO in late April.

Mark Lomas, head of culture, talent and communities will be leaving Lloyd’s toward the end of the year.

The FCA has appointed Chris Knight as the new director of insurance with effect from July. He was latterly the CEO 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.

Vinay Mistry of Apollo and Nick Moore of Argenta have joined the LMA board.

Rob Myers has now retired from the LMA, and we wish him a long and healthy retirement after just shy of 45 years’ service to the market.

3. Looking forward to Q2 2026 areas of focus
   • Continued market response to geopolitical matters.
   • Definition of war (five powers).
   • Working with Lloyd’s on the implementation planning of their strategy.
   • Planning for the May 2026 DyGIST, which is being run by the PRA. Only managing agents with syndicates materially affected by the scenario will be expected to participate and these have already been informed.
   • LMA’s project to digitise wordings.
   • Launch of new computable binding authority wordings.
   • Contractual discussions with Velonetic around renewal of the existing service contract and consideration of material outsourcing.
   • LMA Academy programmes scheduled for Q2 include: Introduction to Lloyd’s and the London Marketplace; Introduction to Insurance Market Cycles; Commercial Acumen for Underwriters; Driving Portfolio Performance; Introduction to Python; Corporate Financial Statements for Underwriters; Working in the Lloyd’s Market Essentials; Terrorism Insurance; Cyber Insurance; Data Visualisation with Python, Cyber Incident Desktop; Claims Operations Programme; Global Macroeconomics and Working in the Lloyd’s Market for Professionals.

4. Key areas of focus across LMA committees and forums that took place during Q1 2026

Committee	Areas of focus during Q1 2026
Underwriting (David Powell)	– Please see above for notes on geopolitical matters, including significant activity by the Joint War Committee, the Joint Liability Committee and the Aviation Committee, together with responding to numerous international, national and trade press enquiries. – See above for reference to the role of the leader report, which was launched in February. – The CUO Committee has set up a working group to explore the risks associated with underwriting data centres, particularly in respect of aggregation and exposure management issues. – The LMA has been working with brokers, Velonetic and Lloyd’s to make material improvements to the vexed issue of processing payment of expert fees. A promising pilot exercise is now underway in the specie market and it is hoped this could be replicated in other areas. – The LMA is working through the implications of a series of Brazilian regulatory changes that took effect in December. A number of model clauses are under review, and a reinsurance clause has been further amended and published. Further guidance is expected in Q2 in relation to use of claims cooperation/claims control provisions. – The LMA has supported an extensive Lloyd’s project to update various Realistic Disaster Scenarios (RDS), including political risk and credit. The new scenarios are now complete, and a test data collection will take place in Q2/Q3 ahead of formal introduction next year. – The inaugural meeting of the newly established Cyber Reinsurance Sub-Committee took place in February, providing a space for the cyber treaty reinsurance community to discuss matters of interest.
Finance, Actuarial, Risk & Sustainability (Paul Davenport)	Finance – Reporting, data and year‑end processes: Year‑end reporting was completed with the first fully tagged set of financial statements. Initial feedback highlighted tight deadlines and cost for tagging and audit sign offs – further structured assessment is needed to understand the issues here. – Reporting simplification and QMA delta: Following the project relaunch on 05 March, there are now two workstreams: a Lloyd’s‑led stream focused on refining QMA Delta data collection, and an LMA‑led stream to define a baseline data set for managing agents with external capital. – Lloyd’s budget, costs and the 1% charge: Lloyd’s presented its 2026 budget at the most recent committee meeting which represents a reduction in Corporation income and expenses relative to 2025. We are following up concerns about the transparency of the 1% charge and rebate mechanism. – USD reporting: The committee discussed the potential implications of Lloyd’s considering a move to US dollar reporting and an initial discussion paper has been prepared identifying implications across market processes. – Faster Claims Payments (FCP): Updates were provided by LIMOSS on adoption and reconciliation challenges. There are ongoing reconciliation issues and broker engagement blocking adoption. The Finance Committee now has a role in FCP governance going forward. – Finance functions and talent: The Finance Committee will shortly issue a data collection exercise from all finance functions to understand the specific recruitment and talent challenges, play this back to the market and determine specific actions for finance in skills development and career pathways.   Treasury and Investments – LIC funding model: The reinsurance treaty has been signed by all managing agents. Systems and operations processes were confirmed to be ready to manage the first collection in April 2026. – Asset infrastructure: Lloyd’s confirmed AAD returns are no longer required, QAD remaining until Q3 2026. Lloyd’s advised that a direct connection with Clearwater is uneconomic. Instead, Lloyd’s will draw data directly from custodians. Lloyd’s will update at its townhall on 15 April. – Strategic asset allocation requirements: Lloyd’s clarified that up to 10% of FAL may be invested in pre‑approved illiquid funds.   Actuarial – Committee updates: Meera Rajoo-Oakley (Antares) and Ben Carter (Asta) are the new Committee of Actuaries in the Lloyd’s Market (CALM) chair and deputy chair, respectively. – CPG process: Proposed improvements to focus on clarity of communication, feedback only on material items, efficiencies for fully aligned syndicates and education/transparency on member modeller. Details to be shared at Lloyd’s capital briefing on Monday 20 April. – Reserve benchmarking: Lloyd’s presented the updated reserve benchmarking pack to CALM and the first formal publication to the market is planned for June 2026. – Partial Internal Models (PIM): An LMA working group is outlining a draft framework and guidance for syndicates. All syndicates have been invited to participate in a pilot for the setting of 2027 SCR. – Major loss event: A CALM working group is focusing on pragmatic approaches to post‑event capital assessment, sequencing of recapitalisation and re-planning, management actions and alignment with Lloyd’s central fund and regulatory expectations. – AI usage: CALM group is monitoring emerging AI use cases for actuarial functions, including potential productivity gains in coding, reporting and data analysis (notably within Excel), with further work planned to develop and share practical, governance‑aware use cases with the committee. – DyGIST: Planning continues with details of LMA drop-in sessions sent to all chief actuaries and heads of exposure management.   Exposure management – Committee updates: Vanessa Jones (Dale) and David Singh (Beazley) are the new Exposure Management Working Group (EMWG) chair and deputy chair respectively. – RDS: New drafts of cyber, credit and political risk RDSs have been produced with the support of exposure management and underwriting groups. – LMA Oasis Insight Conference 2026: This will take place on 28-29 April 2026. – Exposure management oversight priorities: The 2026 focus is on data quality and completeness. An increased number of recent reviews were due to changes in maturity and new syndicates.   Risk – Chief Risk Officers (CRO) Committee priorities and CROs survey feedback: Key 2026 risk themes are geopolitical and macroeconomic risk, AI and technology governance, climate risk and regulatory change. Agreed deliverables were guidance on second-line oversight of enhanced underwriting, a geopolitical risk subgroup, stress and scenario testing guidance for board decision-making, a CRO talent survey with mentoring and networking events, and support for the LMA Risk Radar. – Lloyd’s market oversight: The CRO Committee highlighted some inconsistencies in outcomes-based oversight and application of the Principles Based Oversight framework across teams. Lloyd’s acknowledged this and committed to clearer articulation of risks and expected outcomes, with greater reliance on ORSA submissions and enhanced sharing of insights via the Principle 10 team to reduce duplication. – PRA DyGIST exercise: On 24 February, Lloyd’s and the PRA briefed DyGIST sponsors on expectations. The focus for risk functions is real-time decision making under uncertainty, showing strong governance and credible assumption-making. The LMA is hosting optional cross-functional drop-in sessions after Easter to support members. – Geopolitical risk: A sub-group is working on a geopolitical risk assessment framework which will be circulated to all CROs ahead of 2027 planning. The LMA has organised a briefing session hosted by Control Risks. – Risk culture: The risk next gen group is finalising a risk culture assessment framework which will be presented in May and circulated to all CROs. – AI risk management: The LMA’s work with Barnett Waddingham on an AI risk management survey and AI adoption toolkit will be presented at an event, which you can register for here. Sustainability and Climate Risk Working Group (CRWG) – See above for launch of the underwriting the transition report. – PRA SS5/25 and dialogue with the PRA: In Q1, the CRWG directly engaged with the PRA climate supervision team. Discussions covered proportionality, climate scenario analysis, governance and board roles, providing clarity on evolving supervisory expectations and how firms can demonstrate practical, proportionate alignment. A market survey is being used to capture current practices and results will inform development of a framework suitable for firms with differing risk profiles and maturity levels. – Climate-related litigation risk: Climate litigation risk remained a focus, with discussion on quantification challenges, particularly for casualty lines. – Sustainability reporting and disclosures landscape: On 24 March, LMA hosted a session with Deloitte on the evolving sustainability disclosures landscape across the UK, Europe and other jurisdictions. – Repositioning of the Sustainability Committee: In Q1, the Sustainability Committee held a discussion on its future purpose. Members agreed the committee remains a valuable forum for peer discussion and best practice sharing but could sharpen impact by aligning more closely with underwriting priorities. The committee agreed to develop a paper for the CUO Committee identifying potential focus areas to support underwriting priorities, including insurability and protection gaps, adaptation and resilience through underwriting and product design, and the intersection of AI and sustainability.
Claims (Janine Powell)	– Middle East conflict response: The LMA Complex Claims Group (claims sector group chairs) has met weekly since the outbreak of the war in Iran, supported by several market-wide briefings from McKenzie Intelligence Services. CAT codes 25AA and 25AB have been allocated to help members categorise claims as directly or indirectly linked to the war. – Claims strategy – talent: Following the soft launch of the Claims Capability Framework for new entrants, the LMA Claims team supported market adoption via Q&A sessions and implementation workshops. – Talent attraction: With LMA Board approval, the Forage partnership has been renewed for three years, continuing claims job simulations and developing new programmes for operations and underwriting. – Elevating claims and building US connections: LMA Claims team members chaired and joined a panel at the US Loss Executives Association annual conference (January), discussing the evolving delegated claims model. Topics included some common areas of talent shortages, operational cost optimisation and customer experience. – FinPro Claims Symposium: Took place in February with speakers Sean Coffey (attorney, retired US Navy Captain), Kevin LaCroix (attorney/executive; D&O Diary) and Maximillian Hess (political risk consultant). The panel explored how geopolitical shifts and potential US tariff policies are influencing D&O and wider financial and professional lines exposures. – Cyber Claims Forum: Presented with MDD Forensic Accountants and held in March, this forum focused on cyber property damage (including increasing expectations on CZ policies) and UK/EU claims practices (cultural and regulatory considerations). Contributors included experts from Munich Re Syndicate, Brit Global Specialty, Tokio Marine Kiln, Hiscox, CFC, Resilience, DAC Beachcroft and MDD. – Lloyd’s claims principles: In February, Lloyd’s claims team hosted a workshop for heads of claims on the Lloyd’s claims management principles, focused on helping the market articulate outcomes aligned to the principles. – Delegated authority claims: The Delegated Authority Claims Management Group (DACMG) is engaging members and delegated claims administrators (DCAs) to define a longer-term vision, supported by structured feedback on shared challenges and opportunities. Focus areas include streamlined compliance, improved data quality and cost management. Strategic focus areas will be published in Q2.
Legal & Regulatory (Arabella Ramage)	Legal  – Legal Committee: The Legal Committee appointed new chair Katy Wilson (Ascot) upon the upcoming retirement of the current chair, Rhic Webb of AEGIS. Matthew Hunter of Asta and Alexandra Smith of QBE also joined the Legal Committee as new members. – Enhanced underwriting: We published a chapter in the International Comparative Legal Guides (ICLG) to Insurance & Reinsurance 2026, entitled “Navigating the risks of enhanced underwriting”. The full chapter deals with some of the additional risks attendant on enhanced underwriting models and is available to read on the LMA website.  – Product liability legislation: The legal and claims committees have 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. – Emerging Litigation Forum: We hosted an informative session with Shoosmiths, looking at key litigation trends predictions for 2026, and then focusing on the emerging litigation risks being driven by AI implementation. – Lawyers’ Forum: The forum had a presentation from Kyle Moran and Alan Harrell from Phelps Dunbar in relation to PFAS, toxic torts and public nuisance claims. – Trainees: Jay Desai joined the LMA as the latest recruit to the Legal Wordings Trainee Scheme.   Regulatory – Insurance Europe: The LMA has now formally joined Insurance Europe, which represents trade bodies from across the EU. This is an important step in our regulatory strategy and increasing our international influence on behalf of members.  – Regulatory Committee: Three new members were appointed to the committee in March: Natasha Grasso (Berkley), Kevin Ball (Asta) and Natalie Dick (Riverstone).  – Simplifying insurance rules: In December 2025, the FCA published a policy statement on simplifying insurance rules. The LMA has been working with members to draft market guidance on implementing these changes, which will be published in April. We continue to lobby the FCA to make a meaningful change to its definition of consumer and to clarify its approach to the extra territorial application of its consumer duty rules. We expect further consultation in Q2/Q3 as a result. – 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. – Operational resilience and reporting: This policy statement issued in March has led to concerns around implementation. We will be engaging with the FCA and PRA on how best to deliver proportionally during 2026.   – Modernising redress and the Ombudsman Service: Additional consultations were released in Q1 alongside a policy statement, which we are working through. – Lloyd’s two-stage complaints process: The LMA Conduct Committee has been engaging with Lloyd’s on ending the two-stage complaints process, which was announced in December. The LMA has outlined where further changes are needed to ensure appropriate reductions in burden. The formal consultation ended on 27/03/26, with implementation expected for 01/01/27. – Brazil: The LMA held a number of seminars for the market and produced guidance and clauses to address the changes brought in by the new Brazilian Insurance Act. We also responded to a consultation in relation to the draft implementing regulations for reinsurance, which proposed outlawing claims cooperation and claims control clauses. Our response, which was accompanied by letters of support from the IUA, LIIBA and Reinsurance Association of America, suggested that outlawing claims cooperation clauses was unnecessary and was based on a misunderstanding of how these clauses operated. – Consultations: In Q1, the LMA reviewed and triaged 50 consultations and responded to 9 of them, including The Mills Review into the long-term impact of AI on retail financial services, and the European Commission’s Climate Resilience Framework Consultation. Responses to these and other consultations are always available on our website.
HR, Culture & LMA Academy (Fiona Temple)	– Our LMA HRD Forum was hosted in conjunction with Nathan Adams, Chief People Officer, Lloyd’s and Caroline Wagstaff, CEO, LMG. Nathan talked through the Lloyd’s strategy and took questions on the Lloyd’s people strategy. Caroline updated on the work the LMG is doing in the early talent space, as well as the recent London Matters report. – Our LMA Heads of Talent Forum was held in March. EY led the session on GenAI transforming team performance. – The biennial HR Benchmark Survey was launched, resulting in 50 managing agents signing up to participate. The results will be shared in early September. Several focus groups were conducted with HRDs to review and edit the survey questions. – The LMA Academy delivered 21 events during Q1, with 393 delegates amounting to ~3,800 market learning hours. Key events conducted in Q1 included Introduction to Lloyd’s and the London Marketplace; Data, AI and Automation Essentials; Operations Management Business Simulation; Commercial Acumen for Underwriters; Global Macroeconomics; Reinsurance Contract Wordings; Underwriting Essentials; Introduction to Delegated Authority; and Introduction to Reinsurance. A new course, Introduction to Insurance Market Cycles, launched in February and several additional sessions have been scheduled in Q2 to meet demand. – Applications for the annual Syndicate Business Planning (SBP) Programme were again popular. The programme commenced in late March with delegates attending from across 25 managing agents. – The registration and application process opened in mid-January for the biennial Conducting Business in the US (July in Chicago) in collaboration with the Katie School of Risk and Insurance. In collaboration with Velonetic, we launched a new simulation-based claims ecosystem e-learning module in January. – An LMA strategic priority for 2026 is to undertake research into identifying the demand for extending certain LMA Academy offerings to UK brokers and US employees of managing agents. Work commenced on this research in Q1, with surveys being circulated to LIIBA member firms and Lloyd’s managing agents, respectively. – A non-financial misconduct session was hosted in collaboration with LIIBA and IUA attended by ~150 senior risk, HR, legal and regulatory directors plus INEDs.
Operations & Delegated Authority (Joe Brace)	– Velonetic re-platforming was “sunset” by Lloyd’s, although the work to re-platform the Velonetic back office continues, albeit in a phased manner. LMA work in this area is therefore focused on: – Maintaining operational resilience, e.g. introduction of Multi-factor Authentication (MFA). – Contractual work including the Exit Plan, heritage services contracts (FERN) renewals and changes, data copy and Material Outsourcing Notifications (MON). – Reviewing the incremental delivery plan for modernisation – expected Q2.Maintaining governance over the run, change and risk elements of the existing and proposed services. – Planning and direction of modernisation standards as part of an overarching data strategy, e.g. the Core Data Record (CDR) and EBOT/ECOT messaging. – The opportunities for innovation and modernisation, specifically in data standards, flow and interoperability, still exist and we will continue to work with the market to realise and share the examples that add value. – A broker performance dashboard in respect of aged debt went live in February 2026. The tier one service is free to all managing agents with further detail available, via a tier two service, if desired. – Computable Binding Authority Agreement (CBAA): Work continues on the review, revision and reformatting of binding authority wordings. The information model to support the digitisation of the CBAA wordings has been completed and LIMOSS is progressing this within the Market Business Glossary (MBG). Analogue wordings are targeted for publication post external legal review to be followed by an API accessible version. – Operational resilience testing: The LMA is completing the first co-ordinated vendor test using a claims system supplier for 21 managing agents in Q1 2026. This is expected to be the first of a regular exercise using a shared vendor. Results and feedback will be available in Q2 2026. – Streamlined coverholder compliance: Linked to Third Party Risk Management (TPRM) an RFI was issued in Q1 with a positive set of responses from a wide range of vendors. We will now look to progress the full project in conjunction with LIMOSS. We continue to work with users, SMEs and Lloyd’s to ensure the question sets are appropriate for the use cases across the market. – 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 due in May following market consultation and will cover 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. – The Core Data Record (CDR) consultation continues with the claims CDR consultation completing shortly, to be followed very quickly by the Delegated Authorities CDR consultation. All consultations are planned for completion in Q3 2026. The current published version of the CDR can be accessed via the Market Business Glossary (MBG) on the LIMOSS website.

Archive

• CEO Update – Q4 2025
• CEO Update – Q3 2025
• CEO Update – Q2 2025
• CEO Update – Q2 2024

An update from the LMA’s Operations Director, Joe Brace, for Lloyd’s market Chief Operating Officers and Chief Information Officers.

Archive

• Operations Update – Q1 2025

• Operations Update – Q2 2024

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 fourth quarter of 2025.

Finance

This quarter’s Finance Committee discussions and developments focused on the following items.

Reporting simplification: Following a temporary pause, we have agreed a clear roadmap with Lloyd’s for the next phases of reporting simplification. Lloyd’s is leading a workstream to resolve the QMA Delta and the LMA is running a workstream to bring a consistent definition of data provision to members’ agents and capital providers. A briefing event for finance teams is being arranged for early March 2026. The QMA Delta resolution also includes seeking to reduce the number of audit opinions.

Audit engagement: Lloyd’s Finance is continuing its engagement with audit firms to ensure reporting simplifications do not lead to further fee increases, but managing agents are encouraged to engage with audit firms separately at the highest level. Lloyd’s has secured that only one opinion is required for Solvency UK submissions, with a standardised template provided to audit firms, and confirmed that the process should be simpler than financial statement audits due to the structured PRA taxonomy.

Solvency UK: The annual Solvency UK submission date was confirmed as 12 March, with the timetable aligned to previous years and additional time granted for quarterly submissions.

Lloyd’s 1% charge and rebate: The LMA Finance Committee expressed concern about an inconsistent and subjective approach from Lloyd’s on the rebate process and Lloyd’s has subsequently agreed to perform a rebate for all firms where GWP is lower than plan. The committee will work with Lloyd’s Finance to ensure the process for future rebating is clear and predictable.

Business and capital planning: The process for 2026 resulted in the lowest number and value of loadings to date. Feedback from the market highlighted four key points for improvement.

1. Greater consistency of communication between Lloyd’s departments is needed to avoid short feedback windows for queries (2-4 days).
2. The LMA is also requesting a review of the Member Modeller update process to avoid unexpected late moves in capital and more stable indicative numbers.
3. There is scope to increase the value of the deferred review of capital for aligned syndicates by also delaying plan submission.
4. For the early view of capital, use needs to be restricted to the specific member circumstances where it is reliable, ie new syndicates or member participation on very few syndicates.

FCP governance and LMA Finance Committee role: The Vitesse contract came up for renewal earlier last year. The LMA Claims Committee agreed to a three-year extension to allow time to embed scalable back-end reconciliation processes. However, the Finance Committee is now formally part of the governance process for any future decisions. This ensures that finance functions have a decisive voice in the contract’s progress and deliverables. LIMOSS has produced a dashboard of performance of adoption and progress vs deliverables, which will be presented to the Finance Committee on a quarterly basis. This will enable this group to make informed decisions and continue to surface and resolve the reconciliation challenges. 

Broker performance dashboard: A new broker performance dashboard will be launched in response to increasing concerns from underwriting committees about brokers’ declining timeliness in premium payments, particularly in treaty reinsurance, and the need for consolidated, actionable insights for managing agents. The dashboard will provide multiple views, including market-level and syndicate-level data, with filters for class of business, enabling users to analyse overdue payments, payment timeliness and reasons for failures. The dashboard is expected to be fully live by the end of Q1 2026, providing up to three years of historical data. Managing agents will be able to export underlying data for validation and analysis, and the dashboard will be promoted to all agents, with plans for market-wide demos and reciprocal data sharing with brokers to encourage performance improvements.

Talent pathways: A combined group from the Finance Committee and Finance Next Gen Group are preparing to gather data from all managing agents on finance team size, structure, roles and skills as a baseline for defining talent and career pathways. This research will be played back to the market and help to identify any market-wide initiatives to attract early talent into the market.

Treasury and investments (TIG)

LIC funding model: LIC Europe circulated an updated reinsurance treaty and explanatory pack to all managing agents and all completed the signing by the end of the year. This followed a process of iterative feedback from the LMA’s TIG, Legal and Operations working groups in 2025. The first quarterly collateral deposit collection will be in April 2026.

Asset infrastructure: Lloyd’s asset infrastructure platform for Lloyd’s-managed assets went live in October and is operating well. Lloyd’s provided a town hall update in December (recording here). The second phase will engage managing agents to migrate their portfolios in 2026. 

Lloyd’s Asset Data: If the asset infrastructure project is implemented to plan then the QAD return will only be required to be submitted until Q3 2026. The AAD is now no longer required. Asset data will continue to be included in the Solvency UK returns.

Strategic Asset Allocation Requirements: The committee has discussed and requested clarity from Lloyd’s on the 10% allocation cap for alternative assets within the SSAA, specifically regarding look-through for funds.

Market investment trends: The committee reviewed investment trends seen across syndicates in the market, with a trend towards reduced cash holdings observed. High-level analysis will be shared with the market in an update to the LMA Insights report, following the publication of syndicate results in March 2026.

Actuarial

DyGIST exercise: refer to Exposure Management below.

Major model change process: This was discussed in the context of upcoming requirements for syndicates to update their model change policies by September to incorporate the model limitations process brought in as part of Solvency UK. Details have been shared in Lloyd’s January 2026 Actuarial Oversight Update.

CPG: The process for indicative loadings, red feedback and the general effectiveness of the process was discussed. While feedback was mixed from different stakeholders, Chief Actuaries generally reported a positive experience this year. The results of the LMA survey on the process is described in the finance section above. 

IFoA Exams: The IFoA student survey responses indicated a generally mixed to negative experience, with less than half of the 46 respondents satisfied with their September exam sitting. Survey results have been shared with the IFoA to help focus their planning and improvements for the next sitting.

AI in Actuarial: AI is understood to largely be used in actuarial work for efficiency gains, though distinguishing real applications from ‘hype’ remains a challenge. The committee has agreed to form a working group in 2026 to identify practical AI use cases in actuarial, focusing on concrete examples rather than theoretical discussions. 

Exposure Management

Nat Cat and Non-Nat Cat Materiality Framework: Nat Cat metrics were reviewed with lloyd’s and changes approved. Lloyd’s communicated these to the market in November 2025. Non-nat cat metrics are expected to be complete by end of 2026.

Cyber RDS review: This is underway, with three vendors engaged by Lloyd’s to define replacements for the current scenarios. Market workshops have taken place over H2 2025. Market wide consultation on the draft Lloyd’s return is planned before the end of Q1 2026.

LMA Oasis Conference: This will take place on 28 and 29 April 2026. The agenda has been discussed at the EMWG.

Exposure management reporting requirements: A webinar took place in December 2025 and the recording is available to view here. Syndicates will be surveyed to understand reporting pain points and potential areas for improvement in Q1 2026.

PRA DyGIST: EMWG has continued engagement with Lloyd’s and the PRA as the exercise, for which the live component will be in May 2026, has been scoped. Lloyd’s workshop for managing agents will take place at 10.30 on 25 February. Lloyd’s is updating its internal major response playbook, incorporating lessons from COVID-19 and the Ukraine crisis, and encourages MAs to clarify decision making and communication protocols in advance of the exercise. The LMA intends to establish a cross-functional working group to bring together preparatory guidance for the exercise. 

A casualty podcast by EMWG members was published in January 2026, discussing the key issues around exposure management in this space, available here.

Lloyd’s Emerging Risk Report was presented to the EMWG and can be found here.

Paul Davenport
Finance and Risk Director
paul.davenport@lmalloyds.com

Welcome to our latest report on key activities and developments within the Risk and Sustainability areas relevant to the market arising in the fourth quarter of 2025.

Risk

PRA and Lloyd’s cooperation: Q4 saw some progress on a new cooperation agreement between the PRA and Lloyd’s aimed at reducing oversight duplication. Key outcomes include a more proportionate approach for Category 4 firms (40% of the market) and streamlined SMCR approvals. The LMA CRO committee is supportive of this and willing to support Lloyd’s oversight to develop an aligned view of the risk landscape.

ORSA – SBF alignment: The CRO Committee identified a ‘disconnect’ between managing agents’ three-year plans and ORSA stress scenarios. A 2026 workstream will focus on ‘joining the dots’ to ensure Lloyd’s oversight teams receive a cohesive view of strategy and risk, reducing disparate data requests to managing agents’ oversight teams.

Geopolitical Risk Taskforce: A dedicated market taskforce, led by Lloyd’s Risk and Actuarial oversight teams and with support from the LMA CRO committee, is developing four distinct geopolitical scenarios and a ‘scenario playbook’ to support syndicates in preparing for economic fragmentation and systemic stresses.

AI Risk Management: The Risk Next Gen group is finalising a market-wide AI Risk Management Framework for publication in Q1 2026. This includes a best-practice framework and an analysis of current market use cases and regulations.

Risk culture assessments: Work continues on benchmarking guidance for firms to assess and strengthen internal risk cultures. A draft report is targeted for presentation to the CRO Committee in Q1 2026.

Stress testing workstream: A new group will launch in early 2026 to develop a best-practice framework for stress testing, focusing on management actions and their integration into the ORSA and portfolio management.

Industry networking: Work is underway to re-establish the mentorship program between CRO Committee members and the Risk Next Gen group to bolster the risk function’s talent pipeline.

PRA DyGIST: Preparation is underway for a Lloyd’s Market Day in February to support market readiness for the upcoming PRA DYGIST exercise. Additionally, the CRO committee is currently revising lessons learned in previous market turning events aiming to adapt and share these with the market in advance of the DyGIST exercise.

Sustainability

PRA Climate Supervisory Statement: Following the publication of the PRA’s final supervisory statement (on the back of CP10/25), we have initiated discussions with the PRA to host a formal presentation of the final requirements for all managing agents via our Risk and Climate Risk committees.

UK SRS and Transition Plans: We finalised market responses to the UK Sustainability Reporting Standards and Transition Plan consultations. Key focus areas included technical clarity on Scope 3 emissions and ensuring global regulatory compatibility to maintain the UK’s capital attractiveness.

Lloyd’s Oversight: The Sustainability Committee confirmed with Lloyd’s that based on the Lloyd’s ‘Insuring the Transition’ roadmap, Managing Agents are no longer required to submit annual sustainability strategies. Oversight is now integrated through the Principles-Based Oversight (PBO) framework, with Sub-principle 8 assessments beginning in Q1 2026.

TCX Risk Code: We are providing feedback to Lloyd’s to support the increasing number of syndicates utilizing the Transition Risk Code (TCX) in their SBFs, ensuring capital requirements do not hinder innovation.

Transition Risk Heatmap: The CRWG is exploring developing a sectoral and geographical heatmap to analyse the impact of policy shifts on different industries, whilst developing a climate scenario playbook useful for members meeting PRA requirements.

Climate Litigation Insights: Through CRWG, we ensure that climate litigation insights are included in our monitoring through the LMA’s Emerging Litigation Forum (ELF). The next ELF event is scheduled for 26 February 2026 at 15.00 on MS Teams.

LMA Academy rollout: Targeted sustainability micro-sessions for underwriting, claims, finance and risk are launching in Q1, providing function-specific technical depth.

Underwriting the Transition (v 2.0): The refresh of our flagship report is underway, aiming towards an end of February publication, transitioning to a dynamic online resource to be more accessible for underwriting teams.

Paul Davenport
Finance and Risk Director
paul.davenport@lmalloyds.com

An update from the LMA’s CEO, Sheila Cameron, to managing and members’ agent CEOs.

Archive

• CEO Update – Q3 2025
• CEO Update – Q2 2025
• CEO Update – Q2 2024

Welcome to our latest update on key activities and developments within the Risk and Sustainability areas relevant to the market for the third quarter of 2025.

Risk

The Chief Risk Officers (CRO) Committee and Risk Next Generation Committee dedicated significant time in Q3 to address the complexity and heightened risk posed by the global geopolitical environment and to advance the relevant workstreams.

Geopolitical risk and Lloyd’s approach: Following the June meeting, the LMA Risk team conducted a market-wide survey on geopolitical risk management practices. The results, reviewed by the CRO Committee in September, showed that while 45% of managing agents classify their processes as mature or leading, a significant proportion still rely on developing or nascent frameworks. Key challenges identified include supply chain disruption (57% of respondents), sanctions conflicts and cyber warfare. At the September CRO Committee meeting, Lloyd’s presented progress from its geopolitical taskforce on developing a multi-dimensional Geopolitical Scenario Playbook focused on extreme tail events such as global financial instability and interstate conflict. The committee endorsed this direction and agreed to participate in the planned war-gaming exercises scheduled for Q4 2025 and Q1 2026.

Velonetic re-platforming: The committee discussed the regulatory and assurance implications following Lloyd’s updated approach to Velonetic re-platforming. The committee agreed to monitor the risks associated with the heritage system and noted that Lloyd’s should focus on the operational resilience of this system to support the market until re-platforming takes place. The details of the operational resilience plan are still in progress and will be reviewed by the committee once available.

PRA regulatory engagement: In relation to the 2026 Dynamic General Insurance Stress Test (DyGIST), the committee noted the commencement of the PRA engagement plan in September ahead of the postponed launch in May 2026. A note from the LMA Risk team summarising the key points from the September PRA workshop was circulated to all CROs. The PRA DyGIST will run every two years and will focus primarily on assessing solvency and liquidity resilience to adverse macro-financial and underwriting risk scenarios. The PRA confirmed that the exercise will not test operational resilience or impact tolerances. Managing agents were required to designate a sponsor (the primary point of contact for Lloyd’s) by 14 October 2025 to coordinate their response. The LMA is exploring forming a cross-functional working group to support managing agents in the lead-up to and during the exercise in May 2026.

Lloyd’s governance and risk oversight: In response to managing agent feedback, the committee will engage with Lloyd’s Market Oversight to obtain clarity on the application and assessment criteria within the governance and risk management oversight framework, particularly regarding escalation triggers and how these fit within Lloyd’s broader view of syndicate and managing agent business.

LMA Annual Risk Outlook: The committee formally approved the proposal for the LMA to develop and own an Annual Risk Outlook. This forward-looking publication is intended to consolidate intelligence from all LMA technical committees (risk, underwriting, claims, operations and regulatory) to identify current and emerging risks, map hot topics such as AI and technology risks and provide key questions for boards and ORSA contributors. The inaugural 2026 Outlook is scheduled for release in Q1 2026.

Integrated assurance discussions: Following brainstorming in Q2, the committee is progressing a survey to gauge market maturity and best practice in integrated assurance frameworks. The aim is to promote more effective coordination between the first, second and third lines of defence to demonstrate both efficient coverage (minimum duplication) and effective coverage (no gaps) to boards and audit committees.

AI Risk Management: The Risk Next Generation Committee is preparing to launch a survey to gather data on managing agents’ AI governance and risk management structures and the perceived risks associated with generative AI. The objective is to develop a focused AI Risk Management Framework for the market, to be published later this year.

Talent pathways in risk management: At the request of the CRO and Risk Next Generation Committee members, discussions have taken place on how to support risk functions in developing existing individuals and addressing the potential talent gap within risk management. Further discussions will take place in Q4 at the Risk Next Generation Committee to agree a tangible plan for 2026.

Sustainability

The LMA Sustainability Committee and Climate Risk Working Group’s Q3 discussions centred on regulatory advocacy to shape the UK’s sustainable finance framework, defining the market’s needs from Lloyd’s leadership on sustainability and establishing the path toward the 2026 priorities and deliverables.

Regulatory disclosures and reporting standards: A core focus throughout Q3 was responding to key UK government consultations on sustainability reporting standards and transition plans, aiming to ensure new reporting requirements are practical, proportionate and globally interoperable for the Lloyd’s market. To support members, the LMA and Deloitte hosted an introductory webinar and a virtual roundtable to provide an overview of both consultations, the challenges they present for the London market and to inform the LMA’s response.

UK Sustainability Reporting Standards (UK SRS): The Committee successfully developed and submitted the LMA response to the consultation on the adoption of the International Sustainability Standards Board (ISSB) framework into the UK SRS. The LMA response can be accessed here. The submission focused on essential areas requiring technical clarity for managing agents:

• Clarity on Scope 3 emissions: Consistent guidance is vital due to the high complexity and reliance on third-party data.
• Materiality assessment: Guidance is needed to clarify the application of both single (financial) and double (impact) materiality approaches to prevent market confusion.
• Alignment: Strong emphasis was placed on ensuring the UK SRS aligns with existing UK disclosure frameworks to avoid duplication and excessive administrative burden.

Transition plans consultation: The LMA also submitted its response to the UK government consultation on mandatory transition plan requirements. A key theme of the response was the need for global regulatory compatibility. The submission highlighted the risk that mandatory disclosure requirements, if inconsistent with major overseas regimes such as the US SEC, could make the UK market less attractive to international capital given its position as a net importer of insurance capital. The LMA response can be accessed here.

Lloyd’s sustainability changes: Following the Lloyd’s Corporation’s recent structural changes related to sustainability, the committee dedicated time in September to develop a market-led view on the support required from Lloyd’s. The committee views sustainability as a commercial enabler and a driver of long-term profitability and relevance, not merely a compliance exercise. The market requires clarity on short and medium-term expectations from Lloyd’s and is engaging with the oversight team to understand their approach. The committee will ask Lloyd’s to address foundational market blockers, specifically seeking greater flexibility and approvals for new ESG-linked products, particularly in areas where current capital requirements may be hindering innovation and agility. Additional clarity on how the TCX code can be utilised has been requested from Lloyd’s.

2026 priorities and deliverables: The Sustainability Committee and the Climate Risk Working Group held initial sessions in September to define the strategic focus for the upcoming year.

• Underwriting the Transition Report (v2.0): The committee approved a refresh of the report, moving from a lengthy PDF to a more accessible online resource. The updated version will include refreshed climate and transition data, particularly in the lead-up to the next major COP event.
• AI and sustainability: A potential new workstream was identified for 2026 focusing on the intersection of artificial intelligence and sustainability. This cross-cutting topic may explore both operational and underwriting risks and opportunities arising from AI adoption within the market’s sustainability agenda.
• Climate adaptation: Consideration is being given to developing a briefing paper to support the market in framing climate adaptation by providing real-life examples from Lloyd’s and the wider London market.

Take a look at the Finance and Risk Activity Trackers for the latest information and minutes for each of our committees and groups (website login is required).

Paul Davenport
Finance and Risk Director
paul.davenport@lmalloyds.com