Lloyd's announced it plans to stop accepting admitted market accounts in the United States in a year and focus on the U.S. reinsurance and excess and surplus (E&S) insurance market, where it is the market leader.
As part of this strategy to focus on its core markets, Lloyd's will relinquish its admitted licenses in the U.S. Virgin Islands, Kentucky and Illinois, which together represent US$215 million or 1% of Lloyd's annual U.S. premium income.
Insurance Journal understands that Lloyd's U.S. business is a mixture of admitted SME lines and personal lines.
"This decision was not related to the local markets or the business we write under the licenses, rather it was a recognition that E&S business is a better fit for our underwriters given the market's innovative nature and expertise in emerging risks," said Lloyd's in a market bulletin issued on July 10.
Lloyd's said the product flexibility of the E&S space is key to realizing Lloyd's strategic vision.
"Lloyd's understands that the market and our key stakeholders will need time to make changes to their commercial plans. We are therefore providing a window of 12 months during which new business will continue to be allowed," the bulletin said.
However, as of July 1, 2021, no new business or programs will be accepted on the U.S. licensed platforms.
Regarding existing and renewal business, Lloyd's will be working with the regulators in the licensed territories to develop plans to non-renew this business with as little disruption to the local markets and policyholders as possible.
Lloyd's said it will issue further and more detailed guidance in due course once arrangements with the regulators have been agreed.