Lloyd’s capacity grows to mid-year high

Market capacity in Lloyd’s of London is growing, rising from 12.2 billion pounds (Cdn$30.25 billion) at the beginning of 2002 to a mid-year high of 12.5 billion pounds (Cdn$31 billion).At the recent Western States Surplus Lines conference in Whistler, B.C., Lloyd’s director of worldwide markets Julian James said that the market is at its most attractive stage in a decade, with Lloyd’s syndicates actively raising capital to take advantage of market conditions.In addition to the 12.5 billion pounds capacity, 428 million pounds (Cdn$1.06 billion) of qualifying quota share (qqs) reinsurance agreements have been approved, and more than 500 million pounds (Cdn$1.24 billion) is awaiting approval. Much of this comes from reinsurers in Bermuda and large European companies.Capacity could blossom as high as 12.9 billion pounds (Cdn$32 billion) by yearend, exclusive of QQS reinsurance.”As stock markets around the world take a beating, insurance premiums are rising and are expected to provide positive returns for several years to come,” says James.However, he notes that the market is being selective about new capital. “It is not our intention to allow Lloyd’s to be flooded with so much capital that a soft market is created. Indeed, we are very aware of this possibility. These strong trading conditions combined with our program of radical but sensible modernization proposals are creating a modern, transparent and profitable business fit for the future.”