Lloyd’s of London, the shipping industry’s largest single insurance market place, has shored up its defences against the impact of coronavirus on its business.
Last Friday, Lloyd’s of London closed down its underwriting room to test whether business could continue as usual using alternative trading protocols.
The stress test was intended to reveal any potential problems if coronavirus disruption led to a complete closure of the 300 year-old insurance trading floor and the market is forced to operate under an emergency trading protocol.
The idea was not only to ensure continuity of cover but also offer policy holders the certainty that claims would to be paid on time.
Lloyd’s of London said: “The Lloyd’s market is committed to being there when our policy holders need us the most.”
The underwriting room was also given a deep clean while the tests were carried out.
The Lloyd’s Market Association (LMA), which offers support to Lloyd’s of London members and helps resolve operational issues, plans to start a "work at home continuity policy" from March 17 until the end of the month.
The LMA insisted that, although the London office would no longer be staffed, it is “still open for business”. However, all employees will work remotely and all conferences and committee meetings, including the Joint Hull Committee, will take place through video conference or conference call.
The LMA said: “ We recognise that this is a different way of working. We are fully equipped and prepared to continue working as close to usual as possible with the London market.”
The LMA has also established a policy clause that will ensure insurance cover, including marine, continues if the Lloyd’s of London emergency trading protocol fails and policy cannot be renewed.
LMA deputy director of underwriting Patrick Davison said: “Although the situation specified is extremely unlikely to occur, the LMA and its members felt it prudent to draft this model clause to ensure that Lloyd’s customers are not left without coverage should the coronavirus, or any other event, prevent renewal negotiations from taking place.”
In a separate move Lloyd’s of London has reportedly asked all its managing agents to provide details of predicted losses due to the impact of coronavirus.
Managing agents, also known as MGAs, typically provide Lloyd’s of London backed capital to insurance providers and are common in the fixed premium insurance sector of the shipping business.
