Lloyd's provides update on COVID-19
Lloyd's CEO, John Neal, has provided the an update to the market on Lloyd’s response to the COVID-19 outbreak. Lloyd’s Executive Committee is meeting on a daily basis to ensure it can respond quickly but also be proactive in the context of fast-moving and unprecedented events.
As well as dealing with the issues of the day, it will be agreeing actions pertaining to people, customers and the market, as well as government, regulators and other stakeholders. It is expected that there will be a number of updates over the coming weeks.
John Neal joined a call with the UK’s City Minister, John Glen, and other leaders from the insurance sector to discuss how the industry is responding to the COVID-19 outbreak. The Chancellor of the Exchequer spoke in Parliament about a commitment made by insurers to pay out on valid claims for business interruption where there is either a specific notifiable disease or pandemic extension, or denial of access cover. This is the position of the Lloyd’s market. The reputation for paying all valid claims goes to the heart of Lloyd’s brand, and it is important that clarity is provided to customers.
Supporting the Lloyd’s market
Lloyd’s closed the Underwriting Room on Friday 13 March to test that the market could trade electronically via PPL or via the emergency trading protocols. This test of the market’s resilience went well and provides confidence in the collective ability to trade electronically.
Until now, Lloyd’s Underwriting Room has remained open for business. On a typical day it sees a footfall of around 5,000 per day, however this fell to 1,000 on Monday 16th and under 200 on Wednesday 18 March. Given that most insurance firms have put in place remote working, coupled with the advice from the UK government to avoid non-essential contact, Lloyd’s Executive Committee has today decided to close the Underwriting Room with effect from 16:00 on Thursday 19 March 2020. It states that is has taken this decision with a heavy heart and it has committed to review the situation on a weekly basis. The Lloyd’s building at One Lime Street will remain open for tenants, though this may change in the future.
On Monday this week, the Performance Management team wrote to all managing agents requesting they complete a market return, outlining their expected exposures as a result of the COVID-19 outbreak. The situation is complex and fast-changing but Lloyd’s is seeking to collect the best quality insight it can.
Lloyd’s is in regular contact with the PRA and FCA, as well as overseas regulators, and is working to co-ordinate regulatory requests and avoid duplication. It is also reviewing market return requirements for Q1 with a view to simplifying back to core requests only where it can.
Lloyd’s will report its annual results on Thursday 26th March.