Lloyd’s, the world’s leading marketplace for insurance and reinsurance, announced that its London Bridge risk transformation platform reached a capital deployment milestone of $1.92 bn at the end of 2024.
London Bridge has now established 19 cells, through which $1.92 bn of capital has been deployed, and $2.55 bn committed from institutional investors. This development underscores Lloyd’s commitment to attracting alternative capital sources and enhancing the flexibility and responsiveness of its risk transformation offerings.
Eight Lloyd’s managing agents are now actively utilising the London Bridge platform, with 10 new institutional investors supporting risks underwritten in the Lloyd’s market.
London Bridge provides an access point for qualifying institutional investors, to deploy funds in a tax transparent way into the Lloyd’s market. Lloyd’s members and managing agents can use the vehicle to manage their capital and risk management requirements by attracting new sources of capital and reinsurance protection.
Making the Lloyd’s market more attractive and accessible to institutional investors continues to be a strategic priority for Lloyd’s. We are delighted with the success of the London Bridge platform, which has now become a meaningful source of capital and risk transfer capacity for the Lloyd’s market.
Burkhard Keese, Lloyd’s Chief Financial Officer
“London Bridge has now established itself as one of the most flexible and responsive risk transformation platforms in the ILS market, confirming our belief that Lloyd’s and the UK market remain a great place for institutional investors to access global (re)insurance risk,” Burkhard Keese added.
Working closely with the PRA and FCA, Lloyd’s has developed a set of mandatory terms for the principal transaction documentation that provide greater commercial flexibility whilst maintaining regulatory compliance.
This is embodied in a Scope of Permissions for London Bridge 2 PCC Limited that enables new cells to be set up and reinsurance written without the need for any additional regulatory approval, providing these permissions are satisfied.
Lloyd’s London Bridge risk transformation platform is an initiative designed to facilitate institutional investment in the Lloyd’s insurance market.
By establishing protected cell companies (PCCs), such as London Bridge Risk PCC Ltd and London Bridge 2 PCC Ltd, the platform enables investors to participate in insurance-linked securities (ILS) transactions.
This structure allows for efficient capital deployment and risk transfer, providing a tax-transparent mechanism for investors to access diverse insurance risks underwritten at Lloyd’s.
Lloyd’s LB2: Reinsurance Risk Transformation Platform Overview
Reinsurance Risk Transformation
LB2 is an onshore protected cell company established under the Risk Transformation Regulations 2017 in England. It is authorized and supervised by the PRA and FCA as a multi-arrangement insurance special purpose vehicle. LB2 can reinsure Lloyd’s underwritten business and issue securities to fully fund reinsurance obligations. It operates tax-transparently, with no withholding or income tax on transactions.
Protected Cell Structure
Each transaction occurs through segregated protected cells, which issue corresponding securities. Liabilities are ringfenced to protect against insolvency. Transactions are limited recourse, with liability restricted to the cell’s funded assets. Investor rights are subordinated to the reinsured, with priority of payments applied.
Enhanced Regulatory Permissions
LB2 offers diverse risk transfer solutions to Corporate Members and Syndicates at Lloyd’s. Its Board can approve transactions without additional regulatory clearance, provided key documentation includes Mandatory Terms as per the Risk Transformation Regulations 2017 and EU regulations. Term Sheets must be shared 5 days before completion, and risk must be confirmed within 5 days post-transaction.
