Introduction to Lloyd's: market developments: 2002 onwards
2002 Chairman’s Strategy Group
In 2002 Lloyd’s set up a Chairman’s Strategy Group (‘CSG’) to consider further proposals to modernise the Lloyd’s market. The objectives were to improve the performance and profitability of the market and to make it more transparent, attractive to new capital and comparable with its competitors.
The CSG report led to the setting up of a Franchise Board to oversee the commercial performance of the market. The Corporation acts as the franchisor, setting requirements for underwriting and risk management by the managing agents, who act as franchisees. The Franchise Board approves and monitors syndicate business plans. See LLM1160 for more on the governance structure of Lloyd’s.
Another key feature of the CSG proposals was that syndicates should replace thetraditional system of three-year accounting with annual accounting. This has happened witheffect from 1 January 2005. See LLM2000 for more details ofsyndicate accounting.
The CSG also proposed that unlimited liability underwriting should be phased out in anagreed manner. With effect from 1 January 2003 no new individual Names have been admittedto the market although existing individual Names are allowed to continue underwriting.
Since 1994 corporate members have come to provide most of the capital in the market. In 2007, there were 1,124 individual members actively underwriting on syndicates, 1017 limited liability vehicles (Namecos, SLPs and LLPs), and 119 large company members. Individual members accounted for 7% of the capital supporting the market, limited liability vehicles accounted for 8% and large company members accounted for 85%.