Discover the key advantages of gaining coverholder status at Lloyd’s of London – and how working with Costero Brokers can accelerate the process.
If you’re building or scaling an MGA, winning capacity and distribution is half the battle. Becoming a Lloyd’s coverholder gives you a powerful route to achieve this – unlocking global licences, diverse syndicate capacity and long-term resilience. Working with an expert like Costero means you can get approved quickly and keep growing confidently. Below, we’ll unpack the key benefits, the market context for 2025, and how our specialist team helps MGAs and InsurTechs navigate the process at an accelerated pace.
Challenges that MGAs face in today’s market
For ambitious MGAs, particularly in North America and Australasia, the opportunities are clear – but so are the challenges:
- Selective capacity and changing appetites: Carriers are disciplined on new programmes, want clear evidence of underwriting control and credible data, and can pivot appetite quickly after CAT seasons or loss events. Securing the right limits at sustainable terms – and keeping them through the cycle – is a constant challenge.
- Continuity risk when you rely on a single market: If one partner re-sizes or exits a class, your product and distribution can be disrupted at short notice. Building resilience into your capacity model is no longer a nice-to-have.
- Cross-border growth friction: Expanding beyond one jurisdiction means navigating different licences, taxes, policy wordings and regulatory reporting – all while maintaining a consistent product and client experience.
- Speed to market vs. governance: Retail partners and customers expect rapid launches and iterative enhancements, yet you also need robust oversight: underwriting guidelines, audit trails, bordereaux quality, conduct risk controls and claims oversight that stand up to scrutiny.
- Data expectations have risen: Capacity providers expect clean, timely, reconciled data on premium, exposure and claims – with management information (MI) that supports pricing and portfolio steering. Weaknesses in data pipelines or bordereaux management can slow or stall growth.
- Distribution credibility: Retail brokers and other distribution partners look for paper strength, rating credibility and product stability. Start-ups and scale-ups must prove their staying power to win shelf space.
- Claims experience and customer outcomes: Delivering fair, prompt claims handling – whether in-house or via a third-party administrator (TPA) – is mission-critical for reputation and renewal performance, yet operationally demanding to evidence and manage.
- Macro volatility: Inflation, supply-chain costs and secondary perils are still influencing loss trends and capital charges, putting pressure on rate adequacy and available capacity.
To address these challenges, your MGA needs dependable, diversified capacity; the ability to scale across multiple territories under a single market framework; and the operational discipline and brand credibility that help you win distribution – setting up your programme for durable growth.
What is a Lloyd’s coverholder – and why become one?
Lloyd’s of London is the world’s leading marketplace for specialty risk—where MGAs and InsurTechs can access A-rated capacity, global licensing reach, and decisive underwriting partners to build, launch and scale programmes with confidence.
The market backdrop is constructive but disciplined. Lloyd’s delivered another profitable year in 2024 (combined ratio 86.9%) while still growing top-line by 6.5% – a signal of healthy appetite for well-governed, data-driven programmes. For MGAs with credible distribution and controls, that’s an opening to launch or expand with strong partners. (Source: Lloyd’s)
A Lloyd’s coverholder is a company authorised by a Lloyd’s managing agent to enter into insurance contracts on behalf of a syndicate under a Binding Authority agreement. That agreement defines exactly what you can quote, bind, and administer – including issuing documents, collecting premium and, where granted, handling claims. (Source: Lloyd’s)
There are now around 2,950 approved Lloyd’s coverholders globally, creating a mutually beneficial ecosystem. For Lloyd’s, coverholders enable a vital distribution channel that lets its syndicates underwrite locally without building local infrastructure. For you, becoming a coverholder empowers your business to scale and access new opportunities – with Lloyd’s brand and strength behind you. (Source: Lloyd’s)
The top 5 benefits of becoming a Lloyd’s coverholder
- Access to diverse capacity in one market: Instead of relying on a single carrier, you can assemble a panel across 70+ Lloyd’s syndicates, each with different appetites and strengths – from CAT-exposed property to niche casualty and emerging risks – then build products that reflect your strategy. That creates more opportunity for higher limits, broader structure and robust pricing as you grow.
- Global licensing and scalable distribution: Lloyd’s licences in about 80 territories mean you can design multi-jurisdictional programmes efficiently, often via one contract framework (with local policy issuance where required). That gives you the opportunity to focus on more than just one territory, with the ability to cater for multiple jurisdictions under the same binding authority.
- Bigger limits and broader product scope: Because you can blend multiple markets on a slip (e.g., six or seven syndicates backing a binder), you’re able to stack capacity and widen appetite – for example, running separate binders for flood and wildfire, or adding a new peril without rebuilding everything from scratch. To your retailers and insureds, it feels seamless – while behind the scenes, you’ve built a balanced panel.
- Continuity through market cycles: If one participant changes strategy (say, stepping back from US hurricane), your panel approach makes continuity far more achievable. Others can often increase shares while you introduce a new partner at renewal – protecting your book and your distribution relationships.
- Brand, governance and product innovation: You benefit from the Lloyd’s brand and ratings, plus market infrastructure geared to innovation – including programmes and initiatives like the Lloyd’s Product Launchpad to pilot novel covers with lead syndicates before scaling. It’s a proven path for InsurTechs turning new data or risk models into capacity-backed products.
How Costero makes your coverholder approval easier and faster
To become a Lloyd’s coverholder, you need many elements in place. You need to work closely with a sponsoring Lloyd’s-registered broker (such as Costero) and a Lloyd’s managing agent. You need a clear business plan, robust systems, compliant money handling, experienced key staff and the right cover for your own professional indemnity / errors and omissions (E&O). Done well, today’s coverholder application process is far quicker than it used to be – but only if everything is complete and aligned.
This is where our expertise and relationships come in. Costero is a specialist Lloyd’s registered binder broker with a streamlined, hands-on approach for MGAs and InsurTechs worldwide. We help you shape the business plan, align underwriting guidelines, utilise data effectively, identify the right syndicate partners, and then manage the compliance, placement and renewal cycle day-to-day. Our team can typically secure coverholder approval in as little as two months, once the business plan and supporting materials are ready. We’ve built our expertise by placing dozens of delegated contracts, and managing the monthly bordereaux, premium flow and TPA interactions. That means you can stay focused on distribution and underwriting while we keep the machine running smoothly.
Licensing, appetite, capacity, and continuity are key advantages we see successful MGAs capitalise on – and we help you structure for all these from day one.
Take your next step to Lloyd’s coverholder success
Costero have worked on seven new Lloyd’s coverholder applications in the last 12 months so are extremely well versed in the process and what is involved from start to finish.
Discover how our Binders & Programmes team can help you accelerate to the next level as a Lloyd’s coverholder with our fast-track application process.
To learn more, please get in touch with our expert James Gadbury at Costero Brokers.
