Captive Insurance Companies

Principles of risk transfer
Lloyd’s of London

Unit name: Principles of risk transfer
Student name: Yue Cai
Student number: 25382012
Due date for the assignment: 01 September, 2015
Lecturer: Mr. Hans Buettner

Executive Summary
This report aims to present an analysis of the situation of Lloyd’s, including the brief background, history and unique characteristics of Lloyds’. It analyzes and evaluate the performance management of the various syndicates that operate under its name, including comments on the underwriting, risk management, business plan and capital requirements. The methods of evaluating the performance are PMDR and KPIs and so on. The last part in this report, it describe the Claims management structure at Lloyd’s and how claim settlement process operates. Because it has many financial strengths, the vision in the future should focus on growing premium income with the economic growth and using brokers’ international networks. Appendix provide the detail of PMDR, KPIs and claims management principles.  

Table of Content

1. Introduction 1
2. Unique characteristics 2
2.1 Lloyd’s is a market, not a company 2
2.2 Unique organizational structure 3
3. Performance management 4
3.1 Performance Management Data Return (PMDR) 5
3.2 Key performance indicators (KPIs) 6
3.3 Manage risks 6
3.4 Business plans and Capital requirements 7
4. Claims management 8
5. Business footprint 10
Conclusion 11
References 13
Appendix 15

1. Introduction
Lloyd’s of London (Lloyd’s) is the world’s leading specialist insurance market, which began in Edward Lloyd’s Thames side coffee house in Tower Street in the City of London. Although the exact date of its establishment is unknown, evidence exists that Lloyd’s coffee house was well known in London business circles by 1688. Lloyd’s is not a company, but it is a market where members join together as syndicates to insure risk. It was not involved in insurance but provided...