Lloyd's of London is no longer placing strategic emphasis on pursuing new international licences, its top executives revealed in a letter to the market.
The insurance market's Vision 2025 strategy included obtaining new trading licenses in developing markets.
But in their joint 2017 end-of-year email to the market, Lloyd's CEO Inga Beale and Chairman Bruce Carnegie-Brown said the emphasis had now changed and that the strategy for 2018 to 2020 has been "updated and refreshed" to address the key challenges the market now faces. These include making it easier for business to come to Lloyd's and reducing costs.
"Where Vision 2025 had a focus on acquiring new Lloyd's international licenses, feedback from the market suggested that, given current market conditions, we should focus on doing more with what we have and maximizing business opportunities from existing territories," the statement said.
Lloyd's has reduced the number of strategic priorities to six from the previous eight and changed some of the priorities. Global market access, which was on the list of priorities for 2017 to 2019, is not on the 2018 to 2020 list.
Beale and Carnegie-Brown said Lloyd's main focus for 2018 would be in three areas: market oversight, operations and services, and customers and distribution.
The wide-ranging letter also urged Lloyd's underwriters not to be distracted by any rate increases that could stem from the spate of catastrophe losses in the second half of 2017, which affected the U.S., Caribbean, Mexico and South Asia.
"We anticipate some firming of prices into 2018, but that will not solve the challenges the market is facing," the letter said. "The good work on underwriting discipline, modernization and improved efficiency which was delivered in 2017 to close the performance gap needs to continue throughout 2018."
In the first half, Lloyd's combined ratio — a key measure of nonlife underwriting performance — was 1.6 percentage points worse than that of its competitor group.
Beale and Carnegie-Brown noted that Lloyd's underwriters had paid out almost $2 billion in claims for hurricanes Harvey, Irma and Maria. They also revealed that backers of Lloyd's syndicates had pumped in £3 billion to restore capital levels to where they were before the third-quarter catastrophes.
"No syndicate has ceased trading due to the storms, and there is zero impact on the Central Fund," they added.
All syndicates pay into the Central Fund, which pays claims for them if they become unable to do so.