LMX. Excess of loss reinsurance of Lloyd's syndicates and London Market companies

Document description

The London Market comprises Lloyd's Syndicates and London Market Companies (companies in London or London operations of large composites writing Lloyd's type business). These entities write a wide variety of business, both insurance and reinsurance, and cover all classes of business including such exotic business as professional indemnity and aggregate products liability. Because of the nature of the business it is a necessity to obtain protection covering single risk accumulations and pure catastrophe exposure by way of excess of loss reinsurance. Much of this excess of loss reinsurance is written by other Lloyd's Syndicates and London Market Companies. This effectively means that the reinsurance comes back into the London Market, and that reinsurance protection is required for this further tranche of business which again largely comes back into the London Market. This is what is known as the incestuous nature of the London Market and why it has its own peculiarities and why it therefore needs special consideration. The aim of the LMX Working Party was to set down the nature of the London Market and the special considerations which apply to LMX business.