Lloyd’s of London has attracted its biggest syndicate backed by individuals, or “Names”, since the early 1990s, as the insurance market looks to rebuild a base among private investors after its best performance in years.
The syndicate, announced by industry veteran Richard Brindle’s Fidelis Partnership, aims to take in $180mn of premiums in the second half, and $450mn in 2025. It is a return to Lloyd’s for Brindle, whose career includes founding London-listed Lancashire in 2005.
Brindle said he was initially unsure about rejoining the market because it had become too “bureaucratic” over the years.
“I genuinely think they’ve changed,” he said, adding that Lloyd’s was now seen “as a lead market again on big, complex international risks”.
Fidelis will work with Hampden, the largest agency at Lloyd’s allowing wealthy investors to participate in the market by putting their capital against insurance risks. Individual investors will provide 80 per cent of the capital for the new syndicate, with the rest coming from Fidelis entities. Brindle’s partnership underwrites risks for New York-listed Fidelis Insurance, which floated last year and has a $2bn market value.
The syndicate will look to write business across multiple insurance and reinsurance lines, including political violence, marine, aviation and property catastrophe.
“This is a great opportunity for private investors to enjoy the returns from prudent and profitable underwriting,” said Hampden’s chief executive Alistair Wood.
Names were the historical basis of the Lloyd’s market, but also at the centre of one of its biggest controversies. They previously had unlimited liability for risks, which led to huge financial losses after a surge of asbestos claims in the 1990s.
There were 36,000 individual Names at Lloyd’s but now the number is just a few thousand. While a couple of hundred of these still hold unlimited liability, new Names typically have limited liability.
It is the latest coup for Lloyd’s, which has also attracted insurance group Aviva back to the market . The new syndicate was announced on the day of its full-year results, which confirmed its best underwriting performance since 2007.
Names, whose capital used to make up the entirety of the market, account for only 9 per cent today, with corporate money making up the vast majority. “I do think the pendulum has tipped too much the other way,” said Brindle.
“If you look at any index, any platform, you’d expect that [private investor share] to be higher,” Lloyd’s chief executive John Neal told the Financial Times. The market has been trying to make its reporting and financial frameworks more user-friendly to attract individual investors.