SBAI Announces Acceptance of Lloyd’s Managing Agents as Signatories
The Standards Board for Alternative Investments (SBAI) has determined that Lloyd’s managing agents are eligible to become signatories to the Alternative Investments Standards (the “Standards”). This follows an in-depth review of the framework of Lloyd’s, the specialist (re-) insurance market. Lloyd’s facilitates the risk transfer between insurance policy holders and Lloyd’s members, who provide the capital to underwrite the risk through “syndicates”, which are managed by Lloyd’s managing agents.
The SBAI’s assessment has established that Lloyd’s managing agents have significant resemblance to an asset manager, with fiduciary responsibility towards the investor (member), governance by an adequate regulatory framework, and relevance of the issues addressed by the Standards for managing agents, such as transparency, valuation, risk management and governance.
Thomas Deinet, Executive Director of the SBAI said: “This is an excellent example of how our Standards apply flexibly to other areas of finance and can help lead to better outcomes beyond traditional alternative investments, for the benefit of institutional investors.”
“The structured ecosystem of Lloyd’s, with governance, business planning and reporting requirements, creates an environment for providing “asset management” type activities with a strong third-party control element”, said Michael Hamer, Partner and Senior Investment Due Diligence Analyst covering Insurance at Albourne Partners, the alternatives investment consultant.
Burkhard Keese, Lloyd’s CFO and COO said: “We are delighted that the analysis confirms the similarity between the role of the managing agents and alternative investment managers. The SBAI’s Standards can play an important role in enhancing the accessibility of Lloyd’s for new investors.”
Ariel Re, a reinsurance business based in Bermuda, London and Hong Kong, is the first Lloyd’s business to become a signatory to the Standards.