Lloyd’s has raised the bar for syndicate evaluations of claims management

With the revision to Principle 4, Claims Management is now elevated to the fifth core principle, alongside 1) underwriting profitability, 2) reserving, 3) governance, risk management, reporting, and 4) culture.

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By elevating Claims Management to a ‘hurdle’ principle, Lloyd’s has increased prominence, and by extension, the importance of claim management within the broader business strategy. Specifically, Claims Management needs to be “aligned to and supported by the business, delivering a high-quality claims service which includes a prompt and fair customer service, complying with legal and regulatory obligations”.

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‍These increased standards went into effect as of January 1, 2026.

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This carries significant implications for managing agents and their delegated authorities, including coverholders and MGAs, as well as the carriers that rely on them, as noted by the published sub-principles:

1. Claims Management forms an integral, clearly defined and understood component of the Syndicate Business Plan and of the medium-to-long-term business strategy.
2. Appropriate resources and expertise are in place to consistently deliver against the Claims Management Strategy, Syndicate Business Plan, and medium-to-long-term business strategy. This includes an appropriate method to measure, monitor and maintain resource adequacy, in line with the expected quality of service.
3. Proactive claims management is delivered, supported by an infrastructure appropriate to the size and complexity of the business, reflecting the Claims Management Strategy, Syndicate Business Plan, and in alignment with the medium- and long-term business strategy.
4. Accurate and timely case reserving is maintained in line with the reserving philosophy. Relevant insights, including development potential, are exchanged and considered within the overall business.
5. Delegated claims handling services are delivered consistently and effectively, aligned to the Claims Management Strategy, Syndicate Business Plan, and medium to long term business strategy.
6. Robust governance and oversight are in place, including at executive level, to monitor and manage delivery of outcomes against expectations whilst identifying and realizing opportunities for improvement.

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Alan Gray is uniquely positioned to support this increased scrutiny of claim management. With decades of experience, our recurring independent audits of coverholder and MGA claims operations deliver results such as reduced leakage, stronger compliance, and measurable ROI. With Lloyd’s new principle and hurdle, these points become even more valuable:

• Spotting problems early: We dive deep into claims files, reserving, and compliance, helping identify potential issues in advance. As we all know, prevention is better than cure.
• Meeting Lloyd’s standards: Third-party audits provide transparent and unbiased documentation and reports, to verify that a syndicate meets Lloyd’s principles and expectations.
• Getting reserves right and controlling costs: Reserve funds correctly for volumes tied to delegated programs to avoid misallocating capital.
• Driving practical improvements: Our audits are not just a checklist but come with easy to implement suggestions backed by deep industry knowledge of best practices. Practical outcomes include better workflows, training and tech reviews making day-to-day operations smoother.
• Keeping relationships strong: A clean audit report builds trust with syndicates, which makes authority renewals and expansions easier.

Alan Gray offers independent, balanced audits tailored for both coverholders and MGAs, including dissecting claim files, analyzing reserve methodologies and reviewing binding authority compliance for carriers, reinsurers, and syndicates.

To learn more about how our audit services can support your MGA, coverholder or legacy operations, connect with us at www.alangray.com.