INVESTING AT LLOYD'S 2017 / 2018 - (Incorporating the New Member Statement) - Alpha Insurance Analysts Limited
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INVESTING AT LLOYD’S
(Incorporating the New Member Statement)
2017 / 2018AGENT’S CONFIRMATION We confirm that the information contained in this document has been prepared in accordance with the provisions and requirements for the New Member Statement contained in clauses 7.3 to 7.7 of the Revised Code for Members Agents: Responsibilities to Members 1999. James Sparrow Mrs Emma Royds Risk Warnings & Disclaimers When reading this document, you must consider the following information: Underwriting membership may not be suitable for all recipients of this document. Underwriting at Lloyd’s involves a significant degree of risk and capital providers to the market will be exposed to the risk of underwriting losses. Unlimited members are exposed to losing their entire capital and members underwriting through a limited liability vehicle are exposed to losing the entire assets of the vehicle. Unlimited members will remain ultimately liable for losses, even after death, until the liability of all syndicates participated upon have been reinsured to close, subject to there being no reinsurance failure. Past performance is not necessarily a guide to future performance. The bases and levels of taxation, and thus the financial planning benefits to an underwriting member, may change. There is no guarantee that the tax efficient nature of membership will remain. Alpha is not a tax or financial advisor. Any tax information provided in this document has been supplied by Duncan & Toplis Limited. Independent tax and financial advice should always be sought before any underwriting commitment is made by a potential or existing member These services are not offered publicly to United States persons or in the United States, nor are they offered publicly in any other jurisdiction where such offers may be unlawful This document is intended for general information purposes only and should not be construed as investment advice. This document remains the property of Alpha Insurance Analysts Ltd (Alpha) and is intended solely for the use of the individual to whom it has been sent. It may not be duplicated, retyped, photocopied or reproduced (in whole or part) except with the express permission of Alpha. Unauthorised use, disclosure or copying is strictly prohibited and may be unlawful It is the responsibility of any person communicating the contents of this document or communication, or any part thereof to ensure complete compliance with all applicable legal and regulatory requirements. While all reasonable care has been taken to ensure that the information contained within this document is accurate at the time of publication, Alpha does not make any representations as to the accuracy or completeness of such information. The numerical data in this document has been accessed from various sources including Lloyd’s, The Telegraph, The Insurance Journal, The Insurance Business Review and other information from London Stock Exchange press releases and market commentaries. Registered Office: 107 Fenchurch Street, London EC3M 5JF; Registered in England and Wales Number: 2915929. Tel: 020 7767 3420 Fax: 020 7022 8781; www.aianalysts.com. All calls to Alpha are recorded. Alpha is authorised and regulated by the Financial Conduct Authority (FCA).
CONTENTS WHAT IS LLOYD’S? 2 n The Lloyd’s Market n The Business n The Performance Management Directorate n Equitas REASONS TO INVEST AT LLOYD’S 3 n The Advantages n The Risks n Independent Advice WHY INVEST AT LLOYD’S NOW? 4 n Twelve Months ago….. n Twelve Months on…. n Prospects for 2018 WHY INVEST THROUGH ALPHA? 5 n What is Alpha? n What sets Alpha apart? n Company Policy METHODS OF INVESTMENT 7 n Nameco or LLP n To Set up a New or Buy an Existing Vehicle LOOKING AT THE OPTIONS 8 n Capital Requirement for New Vehicles n Tax Treatment n Fidentia Services LLP ACQUISITION OF SYNDICATE CAPACITY 10 n Capacity Auctions n Pre-emptions and De-emptions n Capacity Value n Capacity outside the Auctions n Purchasing Existing Vehicles CASH FLOW AND EXIT 11 n Cash Flow n Reinsurance to Close n Ceasing Underwriting n Final Closure n Sales of Vehicles RECENT RESULTS 13 n Lloyd’s Results n Alpha’s Results COSTS 14 n Alpha n Fidentia n Lloyd’s ALPHA INSURANCE ANALYSTS LTD 15 n The Alpha Team n Administration in Chatham n Non-Executive Directors n Directors’ Underwriting CAPACITY FOR 2017 19
INVESTING AT LLOYD’S
WHAT IS LLOYD’S?
The Lloyd’s Market
Lloyd’s is one of the major specialist insurance markets in the world and is regulated both by the UK Financial Conduct
Authority (FCA) and Prudential Regulation Authority (PRA). For over 325 years, Lloyd’s has never failed to pay a valid
insurance claim. This has been achieved by building a Central Guarantee Fund to stand behind each of the trading units
at Lloyd’s (known as syndicates) which is there to protect policyholders and to ensure all valid claims can be paid. The
total value of the Central Fund (£2.0bn), the Society’s contributions (£44m) and subordinated securities (£883m) is in
the region of £2.9bn as at 31st December 2016. These are the Society’s central assets and can be used to meet any
valid claim that cannot be met by the resources of any member. For 2017, the Lloyd’s market is likely to underwrite gross
premium income of approximately £23bn (net of acquisition costs) which makes it one of the larger insurance providers
in the world. A.M. Best and Standard and Poor’s have maintained Lloyd’s financial strength ratings of ‘A’ (Excellent) and
‘A+’ (Strong) respectively whilst Fitch improved its rating of Lloyd’s to ‘AA-‘ (Very Strong).
Lloyd’s is not an insurance company but a market composed of different managing agents that operate a total of 105
syndicates for 2017. Investors in the market can provide capital to one or more of these syndicates. Each syndicate is an
annual venture and investment is for one calendar year. The syndicate then reconstitutes itself for the following year. At
the start of 2017, there were 24 syndicates open to third party capital plus six Special Purpose Arrangements and two
Limited Tenancy Syndicates, but there may be more syndicates seeking third party capital in future. Each of these syndicates
has different areas of expertise and transacts a wide variety of insurance business on behalf of its capital providers.
Capital providers receive a share of the profits that accrue from the underwriting business of these syndicates in relation
to the amount of capital provided or, in times of loss, are responsible for paying their share of the trading losses of these
syndicates. The Lloyd’s market benefits from a unique system of overseas business licences that gives syndicates direct
access to virtually all overseas markets. To participate within the market, syndicates are given a licence to trade by the
Performance Management Directorate of Lloyd’s, which is reviewed annually.
The Business
Lloyd’s underwrites a wide range of classes of both insurance and reinsurance business across the world which is
illustrated in the table below.
US & Other United Rest of Central Rest of Total for
Canada Americas Kingdom Europe Asia the World all Regions
Reinsurance 22% 70% 28% 29% 46% 62% 31%
Property 35% 8% 26% 20% 14% 11% 27%
Casualty 26% 10% 25% 22% 28% 10% 24%
Marine 7% 7% 6% 18% 7% 6% 8%
Energy 5% 2% 2% 4% 2% 4% 2%
Motor 3% 1% 11% 3% 1% 5% 4%
Aviation 2% 2% 2% 4% 2% 4% 2%
Total 50% 7% 15% 14% 10% 4% 100%
Source: Lloyd’s Annual Report 2016
2 Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420INVESTING AT LLOYD’S The Performance Management Directorate In recent years, there has been a widely publicised improvement in the results of the Lloyd’s market. There are now far fewer syndicates than there once were and the general level of underwriting professionalism is much higher. The establishment of the Franchise Performance Directorate in 2002, which has subsequently been re-named the Performance Management Directorate (PMD), under the initial leadership of Rolf Tolle, has been critical. The principal purpose of the PMD is to protect the Central Guarantee Fund and to monitor and improve the performance of Lloyd’s syndicates. Its role is to review and approve business plans, set guidelines for the levels of risk taken, ensure a competent standard of underwriting across all syndicates in the market and, particularly, to improve the performance of the bottom quartile syndicates. To date, it has been very successful in this endeavor, especially in the years 2010 and 2011 when the worldwide insurance market, including Lloyd’s, witnessed an unprecedented level of international catastrophe losses. In 2010, Tom Bolt became the Director of Performance Management and continued to develop the cycle management process. Tom Bolt stepped down in 2016 and has been succeeded by Jon Hancock (ex RSA). Equitas The non-life liabilities of Lloyd’s for all years prior to and including 1992 were reinsured into Equitas Limited in 1995 after the market had been threatened by major exposure to asbestosis and pollution. This meant that the market had no continuing liability to business underwritten prior to the 1993 year of account. In late 2006 an agreement was concluded whereby Equitas was acquired by the US reinsurer Berkshire Hathaway as part of a two phase arrangement. In 2009, the High Court approved the statutory transfer of the 1992 and prior non-life business of members and former members of Lloyd’s to Equitas Insurance Ltd which effectively completed the transaction. This gives Lloyd’s a significant trading advantage over many of its industry peers that still have latent exposure to those risks. REASONS TO INVEST AT LLOYD’S The Advantages Lloyd’s offers a unique investment that has the capability of producing high returns. The main benefits of Lloyd’s membership now include:- • Direct investment into a specialist insurance market with little correlation to other asset classes • Double use of assets • Limited liability investment • Tax planning opportunities, including pension and inheritance tax benefits for UK residents • The potential for both underwriting profits and capital gains The Risks Prospective members should note that underwriting at Lloyd’s involves a significant degree of risk and those investing in the market will be exposed to the risk of underwriting losses, both from current underwriting and from exposure to prior years in the event that claims reserves prove inadequate. Members remain liable for losses until the liability of all syndicates participated upon have been closed by means of reinsurance. Even then, in the event of failure of the rein- surer, the ultimate liability remains with the member. For limited members, this liability is limited to the total Funds at Lloyd’s in place plus any pipeline profits, the value of capacity and funds held in the vehicle. The capital value of capacity can go up and down and so there is a risk of capital loss as well as underwriting loss. Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420 3
INVESTING AT LLOYD’S
Independent Advice
Underwriting membership of Lloyd’s is not suitable for all and prospective members should seek independent financial
advice before committing to join the market. Alpha places great emphasis on the initial Fact Find form and annual
“Risk Profile’’ form in order to give members advice that is tailored to the personal and financial circumstances and risk
appetite of each member.
WHY INVEST AT LLOYD’S NOW?
Twelve Months ago…..
• As from January 1st 2016 Lloyd’s was judged to be fully compliant with the EU Solvency II Regime, something that
Lloyd’s had spearheaded for the insurance community in the UK, at an initial estimated cost of £250m, in order to put
the market at the forefront of the new gold standard for insurers worldwide.
• As more high profile cyber attacks occurred both in the US and UK, demand for cyber coverage increased at the same
time as the cost thereof rose, with Lloyd’s syndicates taking a lead position in this emerging class of business.
• The 2015 annual result for Lloyd’s, declared in April 2016, was a profit of £2.1bn (down from £3.2bn in 2014)..
• Rates in both insurance and reinsurance continued to reduce throughout the year..
• The outcome of the vote in the UK for Brexit was a surprise to all, although much work had wisely been done by
Lloyd’s in preparation for either outcome. The result of the referendum has since led to the establishment of a European
based company, potentially to write the majority of Lloyd’s share of the European business, which amounts to 11.5%
of Lloyd’s income, of which 4.5% could have been lost owing to the exit from the single market.
• The election of an unpredictable President Trump in the US created great uncertainty in the short term should his
avowed protectionism during his campaign become reality.
• The mergers and acquisitions activity/consolidation within the insurance industry continued with the merger of Ace
and Chubb in the US, whilst the Japanese insurer Sompo followed the lead of its two other leading Japanese rivals,
Tokio and Mitsui, in buying a large Lloyd’s managing agency, Canopius. Another leading Lloyd’s managing agency,
Ascot Underwriting, was acquired by Canada Pension Plan Investment Board.
• Tom Bolt, the Performance Management Director, and Sean McGovern, the Chief Risk Officer and General Counsel of
Lloyd’s, departed. Jon Hancock arrived in November from RSA to take over the former role from Tom Bolt.
• Against most expectations after the historic Brexit vote, economic activity in the UK continued strongly with ongoing
growth ahead of most of the Western world. However, sterling continued to fall, requiring more syndicate capacity
to be utilised during 2016 to underwrite US dollar and euro denominated risks.
• Members benefitted from syndicates’ pre-emptions for 2017, being an average increase of 7%, to take account of
the fall in the value of sterling against the US dollar and the euro.
• The long drawn-out hunt for a new chairman to replace John Nelson continued. Should it be someone with insurance
experience or not?
Twelve Months on….
• The reinsurance renewals at January 1st continued to show reductions, but most commentators suggest that this
market appears to be nearing the bottom.
• Whilst opportunities for growing Lloyd’s share of the European market are not considered to be enhanced by the
triggering of Clause 50 under Brexit in March, the announcement to locate its European subsidiary in Brussels, using a very
simple structure, has been well received.
• In spite of initial misgivings, early indications suggest that the Trump presidency may be good for the US economy,
Lloyd’s’ largest market, in spite of original threats of possible trade barriers.
• Bruce Carnegie-Brown, a banker with considerable insurance experience, is announced as the new Chairman of
Lloyd’s to take effect from May 2017.
• The significant movement by the Lord Chancellor in the discount rate applied to the Ogden tables for serious bodily
4 Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420INVESTING AT LLOYD’S injury claims in the UK, which was announced in February, caused UK motor and liability insurers, and in turn their reinsurers, to increase their reserves by some £7bn. This is likely to lead to an increase in motor premiums by a suggested £75 per vehicle. • The 2016 annualised results for the market at £2.1bn (2015: £2.1bn), announced in April, show a marked deterioration (7.9% points) in the underwriting ratios from the previous year, which are only offset by substantial foreign exchange wins and unrealised investment gains. • There is unanimous agreement that costs must be cut at every level of the market to reinstate Lloyd’s previous advantage over our peers. • Lloyd’s announces a reduction in subscriptions for 2017 of 10% and a freeze/cut in central costs. • The Chair of the US Federal Reserve warns of further rises in US interest rates during 2017, although these rises are widely expected to be cautious and unlikely to be able to offset any underwriting losses that may be incurred. • At the same time, increasing interest rates are expected to lead to a fall in bond prices, which make up the majority of insurers’ investments, which could impose an even greater squeeze on insurers’ margins. Prospects for 2018 • An increase in either or both attritional and catastrophe losses is likely to lead to the long awaited “red ink” during 2017 and the industry falling into loss. This will bring the prospect of a market turn a year closer. • Whatever some commentators may say, the insurance/reinsurance industry is a cyclical business, where capital will enter and exit at various stages of the cycle, leading to price adjustments and interesting opportunities. • Given that Private Capital represents only 10% of Lloyd’s capacity, we would expect the market for top class syndicate capacity to remain relatively tight, even post a loss, if only for its scarcity value. • Whilst the short term underwriting prospects may not be propitious, the long term case for joining Lloyd’s on a modest basis by buying an existing vehicle, taking advantage of the pipeline profits and being in situ for free syndicate pre-emptions into the next hard market, remains as clear as ever. • In the event of a major market loss during either 2017 or 2018, we would expect the diminishing premium to valuation on existing Lloyd’s vehicles up for sale to reduce further or disappear WHY INVEST THROUGH ALPHA? What is Alpha? Alpha Insurance Analysts Ltd is a Lloyd’s members’ agency that represents and advises third party members of Lloyd’s, both private client and corporate, on their underwriting affairs and administration and is authorised and regulated by the Financial Conduct Authority. The company was founded by James Sparrow and Emma Royds in September 2007. It is the first new Lloyd’s members’ agency that has been set up since 1986. Prior to the establishment of Alpha, there were only two members’ agents active in the Lloyd’s market, which meant that there was little choice for third party investors and much less than had once been the case. The executive directors have over 100 years of experience of the Lloyd’s market between them. For the 2017 account, Alpha represents 211 Lloyd’s members, who collectively underwrite almost £380m of capacity at Lloyd’s. These members either trade on an unlimited liability basis as traditional Names (54), or on a limited liability basis either as Namecos (89) or Limited Liability Partnerships (LLPs) (68). Alpha also acts as an advisor to corporate investors providing administrative back up services. The employees of Alpha completed a management buy-out from the original external shareholders in 2013 and the business is now owned by Archimedes Partners Ltd, a company wholly owned by Alpha employees. Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420 5
INVESTING AT LLOYD’S What sets Alpha apart? Our specialised business is built around a high quality advisory service tailored to the individual needs of our clients. Our client executives are principally syndicate analysts with first-hand knowledge of the underwriters at Lloyd’s. In this way we strive to ensure that our clients have direct access to the best information to support their underwriting decisions. Our straightforward fee structure, which does not include profit commission, sits alongside our doctrine that all syndicates recommended by the agency will also be underwritten by an Alpha director. Our members’ portfolios combine a prudent balance between catastrophe-exposed business and less volatile specialty lines, according to market conditions, with the aim of producing a return that outperforms across the insurance cycle. Alpha believes that personal service is of paramount importance in a private client business. As well as our analysts based in London, Alpha outsources the administrative aspects of Lloyd’s membership to Market Services at Lloyd’s in Chatham, where a team of experienced personnel are dedicated to Alpha members. Alpha’s fee structure differs from its competitors in that profit commission is not charged to any of its clients. This makes its pricing structure very competitive across the insurance cycle. Alpha considers its role is to provide best advice to clients on their underwriting portfolios at all times, regardless of market conditions and income to Alpha. We strongly believe the decision not to charge profit commission removes a potential conflict of interest between clients and their agent and avoids any temptation to take excessive risk for clients in catastrophe exposed classes. Alpha does not pay introductory commissions to intermediaries. Company Policy Individual Service Underwriting portfolios are subject to annual review against the background of continuing appraisal of each clients financial and personal circumstances. Information from clients’ Risk Profile forms and regular contact with our clients is vital in ensuring that our advice to clients in respect of their underwriting commitments is appropriate to their individual circumstances. We also seek to satisfy ourselves that each client has an adequate understanding of the risks inherent in underwriting. We believe that a client’s risk appetite is particularly important and this should be reflected in the quantum of the clients underwriting (relative to the member’s overall financial position), together with the selection and spread of syndicates and categories of business underwritten and thus exposure to certain loss scenarios. Clients are also subject to a half-yearly review to ensure that they comply with Lloyd’s minimum requirements with regard to capital, solvency and Funds at Lloyd’s (FAL). It is important that a clients assets comprise an appropriate level of liquidity as a contingency for losses or cash calls and that such assets are in excess of the minimum levels required by Lloyd’s to enable clients to replenish their FAL quickly and to continue to underwrite after market losses, should they so wish. Clients are required to notify us of any significant changes to their personal or financial circumstances that would impact on their ability to continue underwriting at their current level, or at all. Research and Analysis Our research covers Lloyd’s syndicates that are open to third party capital, as well as new ventures that are proposed. We also analyse competitors in the Lloyd’s, London and worldwide insurance markets. In addition, we evaluate Lloyd’s and insurance markets in general in the context of the UK and other economies. 6 Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420
INVESTING AT LLOYD’S Underwriting Philosophy It is a critical objective of Alpha to have a coherent approach to the structure of each underwriting portfolio, which should contain a suitable spread of syndicate participations. We determine which syndicates should be considered during each auction season and advise on the optimum mix of classes of business and exposure each portfolio should have. We believe that this common basis benefits all our clients. We can then tailor clients’ portfolios to their own needs. Allocation of Capacity Our Portfolio Allocation Policy is reviewed by the board in July and September each year and the revised version is published in our annual Syndicate and Auction Review book in September. Changes to clients’ portfolios are principally effected through the capacity auctions, which now take place in November. We seek to buy and sell syndicate capacity at the most advantageous prices possible. We also execute the specific trading wishes of our clients. In assessing portfolio structure, we take account of prevailing capacity prices and try to avoid buying syndicate participations where we believe that excessive prices make participation unattractive on a risk/reward basis. Currently it is a guideline of Alpha that no one syndicate in a clients portfolio should represent more than 20% of the overall allocated premium limit and that the aggregate capacity managed by any one managing agency should not exceed 25%. In this way it is intended that a severe loss by an individual syndicate will have less impact on overall underwriting. Some clients may elect to participate on syndicates not recommended by Alpha. Such syndicates are known as “starred” syndicates. In these circumstances, the client is asked to confirm in writing that the selection is made at his or her specific request. Any surplus capacity either from capacity handed back to managing agents after the auction process has finished (‘drop’) or from new full tenancy or limited tenancy (SPA) syndicates may be offered to Alpha clients. This will be allocat- ed to clients in accordance with a clients circumstances and appetite. We will ask clients after the main auctions if they are interested in taking up ‘drop’ capacity and will contact them if any becomes available. Requests for any free capacity may have to be scaled back pro-rata to a clients requirement, if the supply of available capacity is less than demand. Conflicts of Interest As mentioned earlier, it is possible to underwrite through Alpha in a variety of ways either as traditional members or as corporate underwriters both private or institutional. Whilst such variety is a benefit, it can increase the possibility of conflicts of interest arising. We seek to minimise, wherever possible, the circumstances in which conflicts of interest may occur. We do not operate any MAPAs (managed funds) which reduces many of the conflicts of interest that can arise. Where the possibility of conflict of interest is identified, the circumstances are fully disclosed and properly managed by Alpha. METHODS OF INVESTMENT Nameco or LLP All new third party private capital investors in the Lloyd’s market invest on a limited liability basis through one of the three members’ agents and the relationship is governed through a standard underwriting agency agreement. A new investor seeking to enter the Lloyd’s market through Alpha can use either a Nameco (limited company) or a Limited Liability Partnership (LLP) for such an investment. Traditionally, members invested on an unlimited liability basis and were known as Names. Corporate capital was introduced into the market for the 1994 account and the first unlimited Names began to convert to limited liability underwriting status in 1996 with the introduction of Scottish Limited Partnerships. Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420 7
INVESTING AT LLOYD’S Namecos were introduced for the 1997 account and this meant that members could underwrite on a limited liability basis in a limited company over which they had complete control. This is not the case with the Scottish Limited Partnership model, where underwriting decisions are made by the General Partner, based in Scotland. Alpha does not offer the opportunity to invest at Lloyd’s through a Scottish Limited Partnership. English Limited Liability Partnerships were introduced into Lloyd’s for the 2007 year of account. They are corporate vehicles which retain a separate legal identity from their partners (or ‘members’), of which there must be at least three, two of which can be provided by a service company. The LLP is the corporate member and the individuals are the partners. It is very important to consider carefully whether to underwrite through a LLP or Nameco as this is dependent on each individual’s personal and financial circumstances. This decision must be made at the outset of the application as it is expensive and complicated to change the structure after set up. Subjects to be considered will be the tax treatment, including inheritance tax and pensions, the initial capital provision, the addition of new participants and the distribution of profits or payment of losses, amongst others. Please refer to our Guide to Namecos and Limited Liability Partner- ships, which covers these issues, as well as consulting both an independent personal financial advisor and Duncan & Toplis, an accountancy firm specialising in Lloyd’s based in Grantham and our joint venturers in Fidentia Services LLP, before making a final decision. Overseas members must invest through a UK company either as a Nameco or a limited company in a LLP. To Set up a New or Buy an Existing Vehicle There is a strict timetable in place to set up a new vehicle which needs to be in place by the end of September. An alternative way to invest is to buy an existing LLP or Nameco. Standard valuations of vehicles for sale are based on the previous year’s auction prices and the latest syndicate midpoint forecasts on the open years. Bids can be made at a premium or a discount to the valuation. The price paid for these limited vehicles depends on supply and demand and future underwriting prospects. The advantages of joining Lloyd’s via this method include immediate cash flow from the open years when these are profitable, the certainty of buying a balanced portfolio and the flexibility of trading through- out the year rather than being restricted by the limited auction timetable. LOOKING AT THE OPTIONS An individual or a group of investors can participate through a Nameco or LLP and they can either be set up new, or purchased from existing owners, subject to availability. Capital Requirement for New Vehicles The minimum capital requirement for a new Nameco is £350,000. The minimum capital requirement for a new LLP is £350,000, with each individual member in the LLP providing a percentage share in accordance with the members’ percentage loss share in the LLP, whichever is the lower. The minimum capital requirement for a single unlimited member converting to a Nameco or LLP is £100,000. The capital requirement is lodged as Funds at Lloyd’s (FAL) in order to support the underwriting of the Nameco or LLP. The level at which members’ FAL is required to be maintained is related to premium income limits and economic capital assessment ratios, which are subject to change by Lloyd’s. Releases of surplus FAL are subject to the half-yearly Lloyd’s Capital Test and there is a closed period between December and the end of April. Losses can be settled from FAL, if no other arrangements are made, but any reductions in FAL will affect future underwriting premium limits. Most new members are required to deposit FAL equivalent to 40% of their premium income limits, with a minimum of £350,000, in their first year. This capital ratio will increase towards 60% as members’ FAL is used to support more than one underwriting year of account. 8 Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420
INVESTING AT LLOYD’S
Tax Treatment
Nameco LLP
Overall Tax Namecos are liable to pay corporation tax on any A LLP does not exist for tax purposes and is, there-
Treatment profits or capital gains realised during an accounting fore, tax transparent as far as the individual LLP
period at the normal corporation tax rates; members are concerned. LLP members are therefore
currently 20%, and falling to 19% from 1 April taxed on profits at their highest marginal rate in the
2017. relevant year. Profits are also subject to Class II and IV
national insurance where applicable.
Underwriting The Nameco can choose to retain its underwriting Underwriting profits are deemed to be earned
Profits profits, or pay some or all of them out as dividends income and are taxed as such. Earnings from the LLP
or salary. The taxation of dividends changed from are pensionable, subject to any maximum
6th April 2016, removing the tax credit entirely contribution levels which may appertain to an
and instead giving a £5,000 tax free allowance on individual’s circumstances at the time, and are dealt
dividend income. Dividends in excess of this £5,000 with and taxed at individual LLP member level, not
allowance will be taxed at 7.5%, 32.5% and 38.1% at LLP level. The levels of profits which can
for basic, higher and additional rate taxpayers be apportioned to ‘non-natural’ persons (a company
respectively and/or a trust) as LLP members are restricted, and
may be lower than the profit share as determined by
the Schedule 2.
Underwriting Losses sustained by the underwriting activities of the A LLP member’s trading losses can be offset against
Losses Nameco can be relieved against profits made in the other income in the current year, subject to a
same and/or preceding year. Any unrelieved losses £50,000 (or 25% of relevant income, whichever is
are carried forward and can be offset against future the higher) cap. Losses can also be offset against the
profits. They cannot be relieved against other income LLP member’s general income of the preceding year,
of the individual shareholders. subject to the same cap. Any unrelieved losses can
be carried forward and offset against the LLP member’s
share of future profits. Claims as to loss offset are
made on an individual LLP member basis and do not
have to be the same for each LLP member.
IHT for UK Only the shares held in a Nameco qualify for 100% 100% Business Property Relief is available on a LLP
residents Business Property Relief, after two years of trading. member’s share of the underwriting capital and assets
Thus, loans by shareholders/ directors to the Nameco of a LLP after two years of trading. This extends to
and FAL assets provided as ‘third party’ will, in the FAL assets provided to back the LLP’s underwriting
main, not qualify as a deduction for IHT purposes. which may not be held within the LLP. This reduces
the inheritance tax liability on a LLP member’s estate.
Entrepreneur’s Entrepreneur’s Relief (ER) may be available to share- When a LLP member disposes of his entire interest
Relief and holders on the sale of their entire stake in a Nameco, in a LLP, Entrepreneur’s Relief (ER) may be available
Capital Gains giving an effective rate of tax of 10% on some or which can reduce the effective tax rate to 10% on
all of the gain. Gains made outside the ER rules are some or all of the gain. Gains made outside the ER
taxed at 10% for basic rate taxpayers and 20% for rules are taxed at 10% for basic rate taxpayers and
higher rate tax payers for disposals made after 6 20% for higher rate taxpayers (for disposals made
April 2016). Gains made by the Nameco (for example after 6 April 2016). For tax purposes, the assets of
on capacity) are taxed at the same rate as profits. the LLP (primarily capacity) are owned by the LLP
Shares in a Nameco can be gifted and bequeathed. members and any gains are taxed on the
Holdover relief for gains may be available on gifts. appropriate shares at the individual LLP member’s
capital gains rate. FAL assets are also not treated
as assets of the LLP and any gains arising on
the disposal of FAL assets are taxed to the member
which provides those assets. Interests in a LLP can be
gifted and bequeathed. Holdover relief for gains may
be available on gifts.
Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420 9INVESTING AT LLOYD’S
Fidentia Services LLP
The majority of the Namecos and LLPs owned by Alpha members are administered by Fidentia Services LLP (Fidentia).
Fidentia is jointly owned by Alpha and Duncan & Toplis. Fidentia’s services include all the administration necessary to ensure
the proper management and conduct of each Nameco or LLP. Fidentia looks after the company secretarial, compliance,
accounting, audit arrangements and reporting to HM Revenue and Customs. All limited liability partnerships are required
to have a corporate designated member connected to a members’ agent which is provided by Fidentia.
ACQUISITION OF SYNDICATE CAPACITY
Capacity Auctions
Regardless of whether an unlimited Name, Nameco or LLP, a member generally underwrites with a spread portfolio of
individual syndicates. Capacity on these syndicates can be bought and sold at the three main capacity auctions that are
held during November. This is the main method for members to build or add to a syndicate portfolio. Payment is settled
shortly afterwards.
Pre-emptions and De-emptions
Depending on market circumstances, syndicates can either reduce (de-empt) or increase (pre-empt) their capacity each
year. Members have no option but to accept syndicate de-emptions, but can elect either to take up or sell any pre-emptions
at auction. Members do not have to pay for pre-emption rights, nor do they receive payment when syndicates de-empt.
Capacity Value
Syndicate capacity on a full tenancy basis is owned by third party members and is an asset that can either appreciate
or depreciate in value, depending on market and individual syndicate circumstances. When members choose to resign
from the market, or reduce their underwriting commitment, they can try to sell syndicate capacity through the auction
system. Any net proceeds will be liable to capital gains tax in the UK. The auctions are fairly illiquid, due to the small
amounts of capacity available to be traded, which can distort price.
300 40
Total capacity traded
35
263
250
Weighted average auc on price (p/£)
Weighted average auc on price
30
214
Capacity traded (£m)
200
25
168
150 160 160 20
149
117 119 15
100
102
89
10
67
50
42 5
0 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Lloyd’s
The weighted average price of traded capacity in the 2016 auctions was 35.0p per £1 of capacity whilst the average
value of Alpha capacity held for 2017 is 45.4p for £1 of capacity.
10 Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420INVESTING AT LLOYD’S Capacity outside the Auctions Over the past few years, a number of managing agents have launched Special Purpose Arrangements (SPAs) or Limited Tenancy Capacity Syndicates (LTCs) which have been offered to members at no cost for a limited period. These vehicles operate in the same way as traditional syndicates, but on a varied agency agreement, sometimes with no carried forward reserves and are often set up to take advantage of specific market conditions or circumstances. These now seem to be the preferred method for new syndicate offerings. Members do not buy and sell these syndicates through the auction process and they have no capital value. Members surrender capacity when the SPA/LTC ceases to trade. If the syndicate is to remain underwriting for the next year of account, existing members on the syndicate are allocated the same amount of capacity as they underwrite for the current year. Any surplus or additional capacity made available by the managing agent will be offered to existing members and to members that have not participated on the syndicate before, in accordance with their circumstances and appetite. Such requests for additional capacity on a SPA/LTC may have to be scaled back pro-rata to a member’s requirement subject to the amount of capacity available to allocate. If the syndicate is to remain for the following year of account, but there is less capacity available than in the current year, existing members will be scaled back in proportion to their current capacity and no additional members will be able to join the syndicate. Purchasing Existing Vehicles An alternative way to acquire capacity is to purchase an existing LLP or Nameco which are put up for sale from time to time and are advertised on the members’ agents’ websites. The advantage of this method is that it gives certainty to the portfolio of syndicates purchased and as the open years of trading are also being bought this can give rise to a gain if the final results are better than the current forecasts (although the opposite can also be the case). No value or liability is attributed to the current underwriting year. CASH FLOW AND EXIT Cash Flow Lloyd’s syndicates have traditionally operated a three year accounting system, so as to allow adequate time for claims to develop before reserves are set and a reinsurance to close (RITC) can be effected. Syndicates now also operate a one year accounting system in parallel with the three year accounting system so that Lloyd’s market results can be published on an annual basis in line with the major insurance companies. Three year accounting means that an investor does not normally receive any profit that has accrued (or pay any losses) from underwriting until the close of the account at 36 months. Profits are paid out in the May following closure (month 41 of the account), or losses are collected in June. Under the dual accounting systems, syndicates can now make early cash releases on profitable years prior to this time. Cash calls can also be made in advance of a year closing, at thirty days’ notice, if large losses have been sustained. Reinsurance to Close Upon joining a syndicate, a member will assume both the assets and liabilities in respect of business underwritten before the date of joining the syndicate through the reinsurance to close (RITC) mechanism. It should be noted that the assets carried forward may not necessarily be sufficient to cover the liabilities. This is known as “inherited liability”. Normally, a syndicate’s year of account will be closed after three years with either a profit or loss declared. The closing of a year of account is effected by a RITC. It must be noted that, whilst in practice the RITC creates finality for a member for that particular year of account, in the event of failure of the reinsurer the ultimate liability remains with the member. Membership of Lloyd’s should be considered as part of a larger and long term investment strategy. Due to the annual nature of underwriting, once membership has been resigned, Funds at Lloyd’s are required to remain in place until the last year of account of every syndicate has been closed. Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420 11
INVESTING AT LLOYD’S If a RITC cannot be effected after three years, usually because there is too much uncertainty surrounding the liabilities within the account at a given time, the syndicate’s year of account will remain open. In this event, liability remains with the members (or their estates) participating in such a year of account until satisfactory reinsurance arrangements can be made. This could take several years and during this period a full release of Funds at Lloyd’s of the member cannot take place. Ceasing Underwriting If the owners of the Nameco, or all underwriting partners in a LLP, wish to resign from the market, the entire company or LLP can be sold to a third party, subject to demand. The potential price of such a sale would include the value of the syndicate capacity based on the previous years’ auction prices and any estimated pipeline profits/losses. Alternatively, the capacity can be sold at auction and the proceeds, together with Funds at Lloyd’s and open year profits, if applicable, are distributed to the company or LLP members, as and when released by Lloyd’s on the close of each account. Finality can only be achieved once all the syndicates have closed all their years of account. Lloyd’s will, however, hold back an amount for another year or two to cover potential overseas tax even after all accounts are closed. If a partner in a LLP or a shareholder of a Nameco dies, or wishes to resign from the market, the share is first offered to the other underwriting partners or shareholders. Participation in a LLP or ownership of a Nameco can be bequeathed on death so that the vehicle can continue to underwrite at Lloyd’s. Final Closure Subsequent to all underwriting liabilities being reinsured, the UK Department for Business, Innovation & Skills (BIS) still require limited liability members to file annual returns, unless the vehicle has been taken over by an administrative company. Fidentia will offer this facility for a fixed fee, subject to all syndicate years of account being closed. The only method of avoiding this requirement is to sell the empty Nameco or LLP, but there is a very limited market. Sales of Vehicles A Nameco or LLP can be sold to a third party at any time during the calendar year. Alpha charges a fee for facilitating this transaction. This enables a faster exit from the market than waiting until all underwriting liabilities have been reinsured, but may involve a discount on value. 12 Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420
INVESTING AT LLOYD’S
RECENT RESULTS
Lloyd’s Results
The following table shows the historical results of the Lloyd’s market (on a three year accounting basis) since the 2001
year of account.
Syndicate Syndicate
Market Result/
Capacity Best Result Worst Result
Forecast as %
£ millions /Forecast as % /Forecast as %
of Capacity
of Capacity of Capacity
2016 Account at 31/03/17 (estimate) 27,512 0.4% 25.0% -25.0%
2015 Account at 31/03/17 (estimate) 26,226 4.2% 35.0% -45.0%
2014 Account at 31/12/16 26,527 10.8% 52.9% -18.6%
2013 Account at 31/12/15 24,998 9.1% 54.3% -70.5%
2012 Account at 31/12/14 24,184 11.9% 62.4% -38.1%
2011 Account at 31/12/13 23,297 3.9% 25.3% -12.6%
2010 Account at 31/12/12 23,022 2.5% 38.0% -41.5%
2009 Account at 31/12/11 18,136 17.1% 64.7% -40.6%
2008 Account at 31/12/10 16,106 10.2% 72.6% -56.0%
2007 Account at 31/12/09 16,433 16.9% 66.5% -20.9%
2006 Account at 31/12/08 14,910 27.1% 73.3% 0.6%
2005 Account at 31/12/07 13,765 2.5% 42.8% -74.4%
2004 Account at 31/12/06 14,962 10.3% 40.6% -18.9%
2003 Account at 31/12/05 14,729 18.8% 39.2% -21.9%
2002 Account at 31/12/04 13,239 11.4% 41.1% -57.8%
2001 Account at 31/12/03 11,263 -18.4% 41.3% -87.6%
Source: Lloyd’s Global results, syndicate best & worst results/forecasts for those reporting a three year result, before any members’ agents’ fees,
as at 31st March 2017. Past performance is not necessarily a guide to future potential profitability.
Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420 13INVESTING AT LLOYD’S
Alpha’s Results
Our results, as compared to the overall Lloyd’s market results, are set out below for 2008 onwards. These results do not
take into account members’ agents’ fees and profit commission.
2015 2016
2008 2009 2010 2011 2012 2013 2014
forecast forecast
Lloyd’s Market 10.2% 17.1% 2.5% 3.9% 11.9% 9.1% 10.9% 4.2% 0.4%
Alpha Insurance Analysts 9.8% 19.0% 4.3% 6.4% 10.5% 10.5% 12.3% 6.3% 1.9%
Source: 2008 – 2009 ALM data, 2010 - 2015 Syndicate Results/Estimates as at 31st March 2017.
COSTS
Alpha
Alpha charges a fee of £4,850 plus 0.5% of a member’s overall premium limit (OPL) allocated by Alpha, subject to a
maximum fee of £35,000 for members underwriting up to £10m.
For members writing in excess of £10m, a fee of £4,850 plus 0.5% of a member’s OPL allocated by Alpha will apply
with no maximum, but this fee may be negotiable.
No profit commission is charged by Alpha to any client.
For clients also underwriting through another members’ agent, 0.30% of the OPL allocated by the other agent will be
charged as a co-ordinating fee.
Clients employed in the Lloyd’s market will be offered a discount of 10% of their annual fee.
A group of clients (either through common ownership, family or other groups) may be able to receive a discount on the
agency fee if they appoint a single spokesperson for the group.
A winding-up fee equivalent to the highest annual fee payable to Alpha in respect of the last three years of account is
payable following resignation or death of an unlimited member.
A syndicate transaction fee of up to 3% of proceeds may be charged per transaction (which includes a syndicate cash
or share offer).
A fee of £10,000 is charged for setting up a new LLP or Nameco. An unconnected group will be charged £30,000
and an existing member with run-off participations only or a ceased unlimited member will be charged £7,000. These
charges will cover the Lloyd’s and Fidentia application and set-up fees and any initial financial and tax advice given by
Duncan & Toplis.
Administrative charges are also levied for any subsequent changes to the structure of a vehicle.
For sellers of LLVs a fee equivalent to the highest annual fee payable to Alpha in respect of the last three years of account
will be charged to cover the cost of dealing with enquiries and administration costs connected with the sale.
Fidentia
Fidentia charges an annual fee of £2,900 plus VAT for the administration of Namecos and LLPs. Fidentia will charge a
fee of £500 plus VAT for the administrative work carried out by them during any sale process.
14 Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420INVESTING AT LLOYD’S Lloyd’s The administrative unit of The Corporation of Lloyd’s that handles members’ affairs is called Market Services. It charges annual fees called ‘Market Services charges’ to both Namecos and LLPs. These fees cover various regulatory, custodial and tax advice charges. The costs normally amount to about £2,000 per year for a business underwriting £1m to cover custodianship of FAL assets and tax preparation. For LLPs there is an additional tax charge for each underlying member. Lloyd’s also charges for the application for approval to make any subsequent changes to the controllers of the Nameco or LLP which will be added to the annual Market Services charge. ALPHA INSURANCE ANALYSTS LTD Alpha currently has ten staff based in the London office. There are six syndicate analysts, a systems analyst, a technical administrator, a compliance officer/company secretary and an office manager/PA. Alpha’s analysts are an experienced group and a number have worked together since 1999 (previously with CBS Private Capital Ltd). Currently five Lloyd’s employees based in Chatham, Kent are dedicated to the Lloyd’s administration of Alpha members. The Alpha Team James Sparrow ACII - Managing Director and Analyst After Law School, James joined CT Bowring, the insurance broking group, in 1976 as a management trainee. He headed up the non-US non marine casualty team, until 1985, when he left to join Donner Underwriting Agencies. Following its sale to Sturge in 1990 he, with three colleagues, acquired a majority shareholding in Philip N Christie, the members’ agency arm of the Charman Group. This was merged with Brockbank Shipton Agencies in 1993, to form Christie Brockbank Shipton (CBS - later CBSPC) members’ agency. Throughout his career in members’ agencies James has been responsible for syndicate analysis. He has been a member of Lloyd’s since 1977 and currently underwrites on an unlimited basis. He was a director of CBSPC until the ongoing client business was acquired by Hampden Agencies Ltd in 2006. Together with a group of investors including Emma Royds, he founded Alpha which started operations in September 2007. James is a significant shareholder in Archimedes, the holding company of Alpha. Emily Apple - Director and Analyst Emily joined CBS (later CBSPC) in 1999 as a syndicate analyst, having read mathematics at Oxford University. Her primary focus was to develop the internal modelling systems used by the analysis team. Following the acquisition of the ongoing client business of CBSPC by Hampden Agencies Ltd, Emily moved over to work with ICP, the CBS corporate vehicle, as the primary syndicate analyst. She worked closely with James on the formation of Alpha and formally joined Alpha in October 2007. Emily is a shareholder in Archimedes, the holding company of Alpha. Kiran Barvé - Systems Analyst and Developer Kiran began working in the Lloyd’s market in 1991 when he joined Anton Members’ Agency Ltd. In 1994 he joined CBS members’ agency (later CBSPC) in a technical role. He worked there for 12 years until the ongoing client business was acquired by Hampden Agencies Ltd in 2006. He resigned from Hampden in 2009 and joined Alpha as systems analyst and developer. Kiran is a shareholder in Archimedes, the holding company of Alpha. Jenny Doyle ACII - Company Secretary & Compliance Officer Jenny began working in the Lloyd’s market in 1988 when she joined John Heynes & Company. In 1993 she joined Wellington Members’ Agency (later taken over by Stace Barr which merged with Murray Lawrence to become Amlin and then CBSPC) as a Names’ Executive until she took on the role of compliance officer in 2004. She worked at CBSPC until the ongoing client business was acquired by Hampden Agencies Ltd in 2006. Jenny resigned from Hampden in 2008 and joined Alpha as compliance officer. She has since also taken over the role of company secretary. Jenny is a shareholder in Archimedes, the holding company of Alpha. Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420 15
INVESTING AT LLOYD’S George Furlonger – Analyst George joined Alpha in June 2015 after four years as a North American property broker at RK Harrison Insurance Brokers Limited. During this time he built up a strong market knowledge, placing business with many of the Alpha supported syndicates. He holds a degree in International History and Politics from Leeds University. He will be looking after members in close conjunction with James Sparrow as well as being actively involved in the analysis of syndicates and the market. George is a shareholder in Archimedes, the holding company of Alpha. Elisabeth Grilo - Office Manager/PA Liz joined Alpha in 2016 as our office manager and personal assistant. Crawford Henderson ACII - Director and Analyst Crawford started his career as a broker at Leslie & Godwin in 1992 having first obtained a degree in Spanish at Durham University and then completed his studies at Oxford University (where he also won a Double Blue in rugby and athletics). In 1995 he joined the Latin American reinsurance unit of Willis Faber & Dumas, travelling extensively to build key business relationships with both new and existing clients, before moving on to lead the Nordic reinsurance team based out of London in 2005. In 2010 Crawford moved across to Willis Re’s retrocession department, using his blend of knowledge, experience and contacts within the international reinsurance markets to originate new deals from both traditional reinsurers and ILS funds. Crawford joined Alpha as a director in September 2015 and is a shareholder in Archimedes, the holding company of Alpha. He looks after members as well as being actively involved in the analysis of syndicates and the market. Mandy Murdoch - Technical Administrator Mandy began working in the Lloyd’s market in 1981 at Alexander Howden Limited and following several mergers became Anton Private Capital Limited. Mandy joined CBS members’ agency in a technical role in 2005 until the ongoing client business was acquired by Hampden Agencies Ltd in 2006. She resigned from Hampden and joined Alpha as Technical Administrator in 2015. Emma Royds ACII - Director and Analyst Emma started at an independent members’ agency, Donner Underwriting Agencies, in 1983 having read Economics and Geography at Exeter University. Since 1985 she has concentrated on the syndicate analysis side of the business and moved to Philip N Christie in 1990 following the sale of Donner to Sturge. She was part of the founding team that went on to merge the agency with Brockbank Shipton Agencies to form Christie Brockbank Shipton (CBS – later CBSPC) members’ agency for the 1994 account. She was the director in charge of the syndicate analysis team until the ongoing client business of CBSPC was acquired by Hampden Agencies Ltd in 2006. Emma was part of the founding team at Alpha which started operations in September 2007 and is a shareholder in Archimedes, the holding company of Alpha. Emma underwrites through a corporate underwriting vehicle, ICP, which was founded and run by her late husband, Charles Harbord-Hamond Alex Skingle - Data Analyst Alex joined Alpha in May 2017 after 27 years’ experience in the insurance industry. His primary role within the syndicate analysis team is to focus on data management. 16 Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420
INVESTING AT LLOYD’S Administration in Chatham Sally Tyler – Team Manager Sally joined Lloyd’s in 1987 to work in the Membership Department. She moved to the General Review Department after five years, where she was responsible for reviewing the compliance of the brokers, managing and members’ agents to Lloyd’s rules and regulations. From there, she moved to the Hardship Department where she remained for 18 years and was responsible for managing the Names worst hit by Lloyd’s losses. Sally joined the Alpha team in 2013 as Team Manager to run our administrative operation. Nicola Baldwin Nicola joined Lloyd’s in 1984 working within the New Names Department. In 1990 Nicola left Lloyd’s to become a Names’ Executive at Barder & Marsh, which became Marlborough Underwriting Agency following re-organisation. She was involved with all aspects of members’ agency work and from 1994 undertook the role of Compliance Officer, leaving in November 1996 to raise her family. After various part time employments, Nicola returned to Lloyd’s in 2008, working as a technician with the Direct Corporate Participants team before joining the Alpha team in 2010. Nicola will be moving up to the London office from August 2017. Frances Farley Frances joined Lloyd’s in 1984 as an administrator/team leader in the New Names Department, dealing with the admission and election of Names. Since then, Frances has worked in various processing and technical areas within the Members’ Services Unit (now Market Services), latterly on the Distribution Team with specific responsibility for the New Central Fund and Special Reserve Fund and assisting with the annual results exercise. Frances was seconded to the Alpha team right from the start in 2007. Denise Holland Denise joined Lloyd’s in 1988 to work in the Membership Department as a funds administrator, where she became a team manager in 1999. She left Lloyd’s in 2004 to start her family but returned in 2007 as an Income Specialist within the Income & FAL management team. In 2010 Denise moved to the Custody Services Department where she was responsible for the validation of applications submitted by members’ agents for the transfer of assets held to support corporate, interavailable and individual members underwriting at Lloyd’s. Denise joined the Alpha team in 2014. Nicola Want Nicola joined Lloyd’s IT Department in August 2010 to work within the IT Customer Support Centre and in 2012 she became part of the third line server team which provides support for the more technical IT queries through the Lloyd’s Messaging infrastructure. Nicola joined the Alpha team in October 2015 to assist with the administrative operation. Non-Executive Directors John Scott FCII - Non-Executive Chairman John brings very broad experience to the Alpha board having spent 20 years at Lazard and currently is a director of three investment trusts including chairman of Scottish Mortgage, UK’s largest conventional investment trust and a member of the FTSE 100 index. He is also chairman of Impax Environmental Markets and a director of Bluefield Solar. John’s experience in the insurance industry includes six years with Jardines in Hong Kong, London and Australia and more recently, twelve years as a non-executive director of Miller Insurance. Miller Insurance is a Lloyd’s broker that places in the Lloyd’s market, amongst many other things, the largest marine insurance contract in the world, for the International Group of P&I Clubs, covering the potential liabilities of over 90% of the world’s ocean going shipping. John joined Alpha in 2013 on the completion of the management buy-out. Alpha Insurance Analysts,107 Fenchurch Street, London EC3M 5JF TEL: 020 7767 3420 17
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