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Lloyd’s plans for third-party & ILS capital appear pushed back

Lloyd’s of London appears to have lowered the priority level of its plans for welcome insurance-linked securities (ILS) capital into the insurance and reinsurance marketplace, as three other initiatives from its Blueprint One are set to be the immediate focus. When Lloyd’s revealed its ambitious “Blueprint One” last September, the plan to “build the most advanced insurance marketplace in the world” placed a heavy emphasis and prioritisation on creating new capital rules and processes to achieve a goal of making it simpler for ILS capital to access the market.

In fact, making it simpler for ILS capital to participate at Lloyd’s, as well as introducing new ways for capital to attach to risk at Lloyd’s including through ILS structures, were seen as a particular focus of the Blueprint One Phase 1 piloting period.

This so-called capital solution was designed to make it easier for capital to enter and easier for those underwriting at Lloyd’s to use that capital, while also providing a range of risk and return opportunities for third-party investors looking to access the returns of insurance and reinsurance business in the market.

As we explained at the time, this was set to include the development of complementary reinsurance investment opportunities in structured, ILS form, including ILS cell-structures, follow-only opportunities, and tracker products for investors and capital providers.

The pilot phase saw ILS and capital solutions being touted as key, with Lloyd’s saying that by investing there, capital providers would be able to benefit from the Lloyd’s brand, licences, ratings, and access to a broader range of risks than they can find in ILS structures from other jurisdictions.

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