Fast-track your MGA or InsurTech business to become a Lloyd’s coverholder

Find out how you can benefit from Lloyd’s new fast-track coverholder approval process to achieve your insurance innovation goals.

The world of insurance is evolving rapidly, with Managing General Agents (MGAs) and InsurTech businesses at the forefront of this transformation. They’re driving innovation, introducing new technologies, and offering niche products that cater to the changing needs of the modern market. The global MGA market now exceeds $110 billion, with the US MGA market alone accounting for USD $90 billion of this. (Source: TheInsurer.com)

Facing your insurance innovation challenges

As an InsurTech or MGA, your journey to establishing a strong position in the insurance market is challenging. You’re a pioneer, exploring uncharted territories with innovative products and services in areas such as:

• Cyber / Tech Risk
• Professional Liability
• Management Liability
• Financial Lines
• Accident & Health
• General Liability
• Niche Casualty Lines
• Trucking – APD & MTC
• Commercial Property
• Affinity
• Parametric / Tornado / Flood
• Data Enrichment / Telematics

But as a trailblazer, your path ahead will be strewn with hurdles and pitfalls. Traditional insurance partners can be slow to appreciate your new ideas, and regulatory requirements can be daunting, especially for start-ups or companies looking to enter new markets.

One of the biggest challenges is accessing insurance capacity and gaining the trust of underwriters who may be wary of the risks associated with novel insurance products or emerging technologies.

How the Lloyd’s market can help you

For MGAs and InsurTechs facing these challenges around the world, the Lloyd’s insurance market in London provides a beacon of opportunity. Lloyd’s is renowned for its capacity to underwrite complex and unique risks, offering a level of expertise and security that’s unmatched globally. The market’s structure, which encourages innovation, speed, and value, is particularly attractive to businesses looking to expand their offerings and reach new customers.

At Lloyd’s, specialist underwriters assess risks and make quick decisions. This immediate access to decision-makers allows for swift solutions and makes it easier for brokers to facilitate the risk-transfer process between clients and underwriters. The market’s syndicates house a concentration of specialist underwriting expertise, making Lloyd’s a hub for innovative insurance solutions.

This has all contributed to Lloyd’s becoming the largest provider of capacity for US MGAs, writing USD $7.3 billion of premium in 2022. (Source: TheInsurer.com)

Discover the advantages of being a Lloyd’s coverholder

For your MGA or InsurTech business, becoming a Lloyd’s coverholder opens doors to a world of possibilities. “Coverholder” is simply the Lloyd’s terminology for a third-party company (such as an MGA or InsurTech) that has been authorised by the managing agent of a Lloyd’s syndicate to write policies on its behalf. The terms of this arrangement are set out in a “binding authority agreement”.

Once you become a coverholder, you can then write business backed by the Lloyd’s market, providing your customers with the assurance of the trusted Lloyd’s brand security and ratings. This status also enables you to offer a wide range of specialist classes of business, leveraging Lloyd’s global licensing capabilities to access markets in over 70 countries.

To underline the scale of the Lloyd’s coverholder opportunity, in 2023 Lloyd’s wrote £52.1 billion of gross written premium – and we believe about 40% of that was written through the 3000+ Lloyd’s coverholders in operation today. So that’s around £20 billion (USD £25 billion) of gross written premium provided through Lloyd’s coverholders across the world.

Putting Lloyd’s coverholder benefits into action

At Costero Brokers, our client Nirvana Insurance is just one example of an innovative MGA that has benefitted from becoming a Lloyd’s coverholder. US-based Nirvana focuses on providing coverage for connected operations, such as trucking and delivery fleets. They use advanced technology, including AI-powered insights, telematics, and continuous risk monitoring, to offer competitive and usage-based pricing. By becoming a Lloyd’s coverholder, Nirvana now has access to impressive capacity – and works closely with specialist Lloyd’s underwriters to enhance its innovative business model.

Find a faster route to becoming a Lloyd’s coverholder

However, until recently, the process of gaining Lloyd’s coverholder status was time-consuming and complex, often taking many months. This lengthy process deterred many potential coverholders, particularly in the fast-moving world of InsurTech, where speed to market is crucial. The traditional approval process involved multiple layers of scrutiny and compliance checks. While ensuring high standards, this also contributed to significant delays.

Recognising the need for a more streamlined process, Lloyd’s has recently introduced a new fast-track approval process for coverholders. This initiative is a game-changer for MGAs and InsurTechs, reducing the time required for approval from several months to as little as two weeks, once the full application is ready. The responsibility for final approval has been delegated to the managing agents of Lloyd’s syndicates, allowing for quicker decision-making and less bureaucratic red tape.

At Costero Brokers, we are uniquely positioned to help MGAs and InsurTech companies worldwide navigate this new fast-track process. As a specialist broker with extensive experience in the Lloyd’s market, we have developed a streamlined approach that ensures new coverholder applications proceed as quickly and smoothly as possible. Our team understands the unique needs of emerging risks for MGAs and InsurTech businesses and is committed to helping you achieve your goals.

Nurturing your unique vision for success

Costero’s expertise in placing binding authorities and programs is outstanding, proving particularly attractive for firms in North America and Australasia. We work closely with our clients from the early stages of designing a program and underwriting guidelines, all the way through to gaining Lloyd’s coverholder approval.

Our fastest coverholder approval to date was achieved in just two weeks, thanks to our close collaboration with Lloyd’s managing agents and our in-depth understanding of the approval process.

Once you become a Lloyd’s coverholder, our support doesn’t stop there. We continue to work with you to develop new capacity and product ideas as your program grows. Our team handles the ongoing broking administration and analysis of binding authority business, providing full technical support for contract preparation and maintenance, as well as claims support to assist with third-party administrators and insurers.

Achieve your insurance innovation goals with Lloyd’s and Costero

Your potential opportunities from becoming a Lloyd’s coverholder are immense. With Lloyd’s new fast-track approval process and the expertise of Costero Brokers, the journey to becoming a coverholder has never been easier or faster.

At Costero, we are committed to helping you fast-track your application, unlocking the benefits of the Lloyd’s market for your business. Whether you are an established MGA or upcoming InsurTech innovator, we have the knowledge, experience, and resources to guide you through the process and beyond. Partner with us, and take the fast track to success as a Lloyd’s coverholder.

To learn more about our services for MGAs and InsurTechs and discuss your goals, please get in touch with our experts Jamie Webb or James Gadbury at Costero Brokers.