LMA: Driving change in Lloyd’s of London
The Lloyd’s Market Association is driving the evolution of the Lloyd’s of London marketplace in the heart of the City.
The specialist insurance market is London’s workhorse. It contributes nearly £50bn to the UK economy—two per cent of overall GDP—and at its core lies the Lloyd’s of London insurance market.
Lloyd’s Market Association (LMA) is a body that represents all 55 of Lloyd’s managing agencies and is responsible for driving change in the market.
Sheila Cameron, the LMA’s chief executive, told City PM that the organisation “exists fundamentally to make this market a better place.”
She took over the leadership role in January 2019 after 17 years in the industry, from the back office at Xchanging to leading on Solvency II changes at Hiscox.
As head of the LMA, Cameron oversees a body with a mission to provide professional and technical expertise in areas ranging from model policy wording to implementing innovative technologies.
A seat at the table
A large portion of the LMA’s role is to lobby regulators that its agencies are regulated or dual regulated by, such as Lloyds of London, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
It also works with the government to improve its understanding of what the industry does and the role Lloyd’s plays in the global insurance marketplace.
Cameron said: “[It’s about] making sure that the government understands who we are, what we do [and[ how many people we employ.”
“Making sure that the government understands how important the commercial and speciality insurance world is to UK PLC because we haven’t historically been very clear in our message in that respect, but we are changing that,” she added.
Fixing the culture at Lloyd’s of London
Back in 2019, Bloomberg published a report that threw Lloyd’s culture into the hot seat.
The report highlighted a male-dominated workforce and excessive drinking, which highlighted the work Lloyd’s still has to do to improve its reputation.
“I think people were quite shocked at some of the stuff that came out, and rightfully so,” noted Cameron.
Since then, Lloyd’s has overhauled its culture with updated rules, standards, fines, and a push on non-financial misconduct.
Cameron explained that when Lloyd’s performs its regulatory oversight on its members, the members must follow 13 principles, one of which is culture.
“But if you don’t meet the expectations, from a Lloyd’s perspective, then you will be penalised in terms of your rating overall, and that rating influences what business you’re allowed to write,” she explained.
In March, Lloyds revealed it hit a short-term target of filling 35 per cent of leadership roles with women, defined as board, executive committee and directory courts of executive committee.
“There is a change in our leadership profile and in the people coming in at entry-level but that doesn’t mean we’re there, this is a journey, not a destination, so there is a long way still to go in relation to culture,” Cameron stated.
Digitalising Lloyd’s the marketplace
Cameron also sits on the Blueprint Two committee – the plan to bring the Lloyd’s market into the 21st century.
Blueprint Two was launched five years ago, but since its introduction, the programme has been delayed multiple times.
Lloyds initially estimated that phase one would launch in June 2024, but it was pushed back to July 2024, and then again to October 2024.
“We (LMA) have a lot of involvement in Blueprint Two,” noted Cameron.
When asked why the strategy had taken so long to implement Cameron said: “There are many different aspects about why we are where we are [and] fundamentally, from our perspective, the centralised back office, which used to be known as Exchanges, now known as Velonetic, is infrastructure that requires investment.
“Parts of it are 30-plus years old, and you know, from an operational resilience perspective, which is what the regular looks at, and rightfully so, we’ve got to invest in that,” she added.
As she pointed out, “it is a hairy programme” as the infrastructure moves over $100bn (£78bn) in premium payments annually alone.
She noted that she chairs the Data Council, which brings together brokers and insurers across the market “to figure out how we get to the data-driven marketplace.”
“All change programmes are difficult when they’re of this scale, especially when you’re talking about that amount of money being moved… but everybody remains committed to it,” she added.