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

The latest responses can be found on our website.

Arabella Ramage
Legal and Regulatory Director
Lloyd’s Market Association

Issued: 03 August 2026

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 on lmadare.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.

For more details, contact Carla Wise.

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. 

Read more here.

LMA Academy

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.

Register for LMA Academy events via our website (login required).

Signposts and feedback

Dates for your diary

• 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.

Joe Brace
Operations Director  
joe.brace@lmalloyds.com

Archive

• Operations Update – Q1 2026
• Operations Update – Q1 2025
• Operations Update – Q2 2024

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

1. 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.

2. 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.

3. 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.

4. 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, Actuarial, Risk & Sustainability (Paul Davenport)	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.

Archive

• CEO Update – Q1 2026
• CEO Update – Q4 2025
• CEO Update – Q3 2025
• CEO Update – Q2 2025
• CEO Update – Q2 2024

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.

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

Sustainability and Climate Risk

PRA SS5/25 implementation and gap analysis

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.

Members interested in exploring the framework further are encouraged to download the report and supporting guidance from the ClimateWise website.

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 it 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 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).

• 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

• 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.

Claims strategy, NexGen and delegated authority: jenny.neale@lmalloyds.com

Claims operations, property and reinsurance, data and digital: sebastian.rolf@lmalloyds.com

Claims sector groups and Emerging Professionals Claims Community: courtney.blinco@lmalloyds.com

You can reach me at janine.powell@lmalloyds.com or phone +44 7771117305.

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