Lloyd’s announced that it has received regulatory approval to implement a new multi-insurance special purpose vehicle, which aims to attract new forms of capital.
A key milestone for the future of Lloyd’s strategy, the new platform will facilitate investor access to the Lloyd’s market and benefit investors by providing a more transparent and efficient capital management process.
Using UK Protected Cell Company (PCC) legislation, Lloyd’s sponsored the creation of an independent UK Protected Cell Company (PCC), London Bridge Risk PCC Ltd.
The PCC will provide an access point for UK and international investors, including investors in insurance-related securities (ILS), to deploy funds in a tax-transparent manner in Lloyd’s market.
Lloyd’s members will be able to use the new vehicle to manage their capital needs by attracting new categories of investors such as pension funds and will benefit from reduced set-up times and reduced transaction costs.
In addition, standardized documentation and processes have been developed, designed to make the process faster, more tax transparent, and to streamline the approach to investor regulatory approval.
As long as new individual proposals use standard documentation and remain within the regulatory “scope of approvals”, this will be a simple notification process for each agreement, eliminating the need for costly and often time-consuming individual requests.
The new vehicle complements the more traditional approaches to capital deployment at Lloyd’s by providing an additional option.
The insurance management services of London Bridge Risk PCC Ltd. will be supplied by Horseshoe, which specializes in the management of ILS vehicles and operates in multiple jurisdictions.
“As part of the Future at Lloyd’s strategy, we continue to look for all ways to make the deployment and management of capital at Lloyd’s easier and more efficient,” commented Burkhard Keese, CFO, Lloyd’s.
“Through our sponsorship of the London Bridge Risk PCC, we will be giving investors the opportunity for a new, tax-transparent way to participate in the market with standardized documents and a much simpler repeatable process,” he added. .
“ILS investing is not new to Lloyd’s, but it is the first time that a UK PCC has been set up as a platform for investors to support and provide capital to Lloyd’s members. We look forward to working with investors and Lloyd’s members who wish to use this new CCP to structure their participation in Lloyd’s. “
The multi-insurance special-purpose vehicle has received regulatory approval from the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
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