Lloyd’s to launch insurance-based index in 2016

Lloyd’s of London, the world’s specialist insurance and reinsurance market, announced on Wednesday that it plans to launch its own insurance-based index in the summer of 2016.

Lloyd’s said in a statement that the release “would be the first index for diversified risk,” showing loss ratios and focused on insurance performance.

“The availability of detailed insight into the performance of the market could provide managing agents, brokers and other insurers with new options for managing risk and form the basis of index-related products of interest to the wider capital markets,” Lloyd’s said. “Lloyd’s position as the only insurance market in the world means it has access to an extensive range of high quality data, both current and historic, and is therefore uniquely placed to provide an index of diversified underwriting risk.”

This Lloyd’s Index will show loss ratios – premiums versus claims – for the Lloyd’s market on an aggregated basis, and will focus entirely on insurance performance. Subscribers to the index will be able to view data on a whole market basis, the statement said, adding that it is intended that the index will be published quarterly. It is also anticipated that additional indices defined by class of business will be available in “due course.”

Over the coming months, Lloyd’s will seek market input on the initiative as well as discuss appropriate governance measures with regulators in the United Kingdom.

“This is an exciting and innovative development for Lloyd’s,” said John Nelson, Lloyd’s chairman, in the statement. “Our continued success is dependent on being able to develop the tools the market needs and also reflect the environment it is operating in. I believe this proposal would be advantageous to both Lloyd’s and non-Lloyd’s participants, keeping pace with the evolving insurance industry and the new sources of capital now available. We look forward to hearing the views of the market.”

Lloyd’s is the world’s only specialist insurance and reinsurance market, with more than 90 syndicates underwriting insurance and reinsurance in 2015, covering all lines of business from more than 200 countries and territories worldwide.