In The Middle Of Hurricane Season, Lloyd’s Of London Says It Will No Longer Write Insurance Policies In USVI
LONDON — Blame it on coronavirus, but Lloyd’s of London has voluntarily given up its licences to write insurance policies in the U.S. Virgin Islands.
Lloyd’s says the new policy is part of its broader focus on reinsurance — taking some high-risk portfolios from other insurers in the United States, where it is a market leader, according to Insurance Insider.
In a market bulletin on Friday, Lloyd’s market management said agents would have 12 months to stop writing new business here and set up alternative arrangements, which could include the use of insurers to cover a specific risk, such as a catastrophic windstorm.
The pull-back comes as management moves ahead with plans to double-down on its wider United States presence, which accounts for 45 percent of its insurance policies.
Lloyd’s management team now considers Canada and Latin America to be higher priority locations than the U.S. Virgin Islands, according to Insurance Insider.
The volume of business affected by the changes accounts for less than one percent of Lloyd’s annual U.S. premium income – or about $215 million, according to Insurance Insider.
Lloyd’s was the largest insurer of United States “excess and surplus” business in 2019, reporting a 24 percent market share in that insurance class.
“It wrote total E&S premiums of $12.5 billion that year,” Insurance Insider said.
By announcing the strategy shift, the corporation said Lloyd’s would work closely with policyholders and the U.S. Virgin Islands’ Banking and Insurance Division of the Lieutenant Governor’s Office “to ensure the withdrawal causes as little disruption as possible.”
“This decision will enable us to strengthen our market leading position in surplus lines and reinsurance, supporting Lloyd’s continued growth in the US,” Lloyd’s CEO John Neal said. “This will be a key factor in our future success, driven by the Future at Lloyd’s strategy, to build the most advanced insurance marketplace in the world,” he added.
Lloyd’s has experienced a surge in submissions that sources estimate at between 30 percent and 50 percent in recent months, driven in part by the coronavirus crisis. Much of that growth has been driven by the United States’ high-risk excess and surplus market.
Besides the territory, Lloyd’s says it also plans to pull out of Kentucky and Illinois as part of this same new business strategy.