Lloyd’s of London recently announced its plans to relinquish its admitted licenses in Kentucky, Illinois, and the US Virgin Islands. In a bulletin, the market said that they will stop accepting the renewal business on an admitted basis on July 1, 2021. They wish to focus on the U.S. reinsurance and (E&S) insurance market, where it is the market leader.
The three US territories account for $215 million or 1% of Lloyd’s annual US premium income, the bulletin said. They have held admitted licenses for decades in those territories.
On July 10, in a market bulletin, Lloyd’s made a few statements. They were saying that this decision had not in any way been related to the business under the licenses or even local markets. However, it had been recognition of E&S business being a preferable fit for their underwriters keeping in check the innovative nature of the market and expertise when it comes to the risks that are emerging.
Lloyd’s said the product flexibility of the E&S space is key to realizing Lloyd’s strategic vision. Moreover, Lloyd understands the time it’s going to change certain commercial plans by the key stakeholders and the market. And hence, they are giving away a 1-year window for the new business as said by the bulletin.
However, they won’t accept new business or programs on the US licensed platforms after July 1, 2021. Regarding the existing and renewal business, Lloyd will be working with the regulators in the licensed territories. It is 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.