TLC as Lloyd's Coverholder

What is a Lloyd’s Coverholder & what are the benefits of Coverholder arrangements?

What is a Coverholder?

Coverholders are an important source of business for Lloyd’s. Their numbers have increased steadily in recent years, and there are now about 2,500 Lloyd’s coverholders producing 30% of Lloyd’s premium income each year. The balance of Lloyd’s business is distributed around the world through a network of brokers.

Coverholders allow Lloyd’s syndicates to operate in a region or country as if they were a local insurer. This is achieved by Lloyd’s syndicates delegating their underwriting authority to coverholders.

TLC has been through a very extensive process over the past 12 months ensuring that its systems and people comply with the extremely high standards insisted upon by Lloyd’s.

As in TLC’s case, the coverholder has been granted authority to underwrite on behalf of a Lloyd’s syndicate. TLC as the coverholder will issue the required insurance documentation and handle claims in accordance with the terms of the delegated authority as set out within an agreement known as a binding authority.

The Lloyd’s binding authority agreement with TLC will be clearly stated on all documentation under the section describing the insurer as follows:

INSURER: Certain Underwriters at Lloyds under Agreement Number: SC 3342010219
TLC Insurance Limited as Lloyd’s Coverholder

The coverholder model is a proven and successful way of placing business with Lloyd’s, providing many benefits to each of the parties involved:

Benefits to TLC as a Lloyd’s Coverholder

Coverholders benefit from partnership with Lloyd’s syndicates by gaining access to Lloyd’s excellent brand, security and ratings, as well as access to experienced underwriters and brokers. TLC is now therefore able to offer a range of specialised covers for the contractors industry in New Zealand which are underwritten at Lloyd’s

TLC now also handle the claims (with support from their Lloyd’s Managing Agent based in Sydney for claims in excess of the limit stated within the coverholder agreement). TLC has 12 years experience dealing specifically with this class of business within the NZ market. Together with the expertise provided by our experienced team of loss adjusters TLC is now able to offer the direct benefit of those years of experience when a claim happens.

Benefits of placing business with TLC as a Lloyd’s Coverholder

In addition to the above benefits, placing business with coverholder provides a more cost effective means to access Lloyd’s than on an open market basis.

Unlike some Lloyd's facilities, TLC underwriting and claims matters that are above the TLC authority limit will be made by one Lloyd's Managing Agent based in Sydney and not a panel of underwriters located in London.

Benefits for Lloyd’s syndicates

Coverholders enable syndicates to underwrite locally without the need for expensive local infrastructure. But, the key to this is finding coverholder partners with the right experience and quality. These businesses will usually have considerable expertise in particular niche products and regions and have excellent local relationships and can also help develop new products in partnership with Lloyd’s syndicates and Lloyd’s brokers.