The Lloyd’s of London insurance market, a 333-year-old institution, remains a global leader in specialist insurance, underwriting risks across 200 countries and generating £55.5 billion in gross written premiums in 2024. Yet, in an era of rising geopolitical complexity, climate-driven catastrophes, and digital disruption, sustaining profitability demands more than underwriting expertise. For senior finance professionals steering Lloyd’s syndicates, Enterprise Performance Management (EPM) systems offer a strategic edge, enabling sharper premium planning and robust risk management to drive sustainable financial success.
The Profitability Imperative at Lloyd's
Lloyd’s has shown remarkable resilience, posting a £9.6 billion profit before tax in 2024, underpinned by a combined ratio of 86.9% – a clear signal of underwriting discipline. However, the market faces mounting pressures: competition from emerging insurance hubs, volatile claims from natural disasters, and the need to balance growth with cost efficiency. As John Neal, Lloyd’s CEO, emphasised, “The 2024 results demonstrate clearly that the Lloyd’s market is in good shape, underpinned by that commitment to performance, discipline, and sensible scale.”
For finance leaders, this translates into a dual challenge: optimising premium income while managing the financial risks tied to underwriting complex, high-stakes policies. Traditional tools; spreadsheets and siloed data systems; fall short in delivering the real-time insights needed to navigate these dynamics. This is where EPM steps in, offering a unified platform to align financial planning, operational strategy, and risk oversight.
EPM: A Catalyst for Premium Planning
Premium planning in Lloyd’s is a high-stakes exercise. Syndicates must price risks accurately, factoring in inflation, market conditions, and the potential for large-scale claims, such as those from hurricanes or cyber breaches. In 2018, Lloyd’s faced £2.9 billion in claims from natural catastrophes, highlighting the financial volatility of mispriced risks. EPM systems address this by integrating financial and operational data, enabling finance teams to model scenarios, forecast cash flows, and set premiums that reflect true risk exposure.
Consider a syndicate underwriting US property reinsurance, where premiums have surged 180% since 2017 due to heightened risk perceptions. Leveraging an EPM platform, such as Pigment or Anaplan, allows finance professionals to analyse historical claims data, incorporate real-time market trends, and simulate the impact of rate changes on profitability. By moving away from manual processes, syndicates can reduce errors, accelerate decision-making, and ensure premiums align with long-term financial goals.
Additionally, EPM supports collaborative planning across underwriting, actuarial, and finance teams. For instance, a syndicate targeting growth in cyber insurance – rapidly evolving risk – can use EPM to align premium strategies with capital requirements and regulatory constraints. This integrated approach ensures that growth is profitable, not reckless, as Lloyd’s executives have stressed in their focus on “disciplined growth.”
Strengthening Risk Management with EPM
Risk management is the backbone of Lloyd’s, where syndicates pool capital to underwrite diverse risks, from aviation to political instability. The market’s Central Fund and A+ financial strength rating from AM Best underscore its commitment to stability, but individual syndicates must still manage their own exposures. EPM systems enhance this by providing tools to monitor, analyse, and mitigate financial risks in real time.
One critical area is portfolio management. Lloyd’s has long emphasised active portfolio management to rebalance underwriting toward profitable lines of business. EPM platforms enable finance leaders to slice and dice portfolio data, identifying underperforming classes – like those hit by 2018’s natural catastrophe losses – and reallocating capital to high-return segments, such as specialty insurance. For example, Willis Towers Watson’s work with Lloyd’s highlights how effective portfolio management can isolate performance drivers, ensuring syndicates focus on sustainable profits.
EPM also strengthens cash and liquidity management, a priority for finance leaders wary of claims volatility. By automating account reconciliations and providing real-time cash flow visibility, EPM helps syndicates maintain liquidity to meet policyholder obligations, even during major loss events. This is particularly vital in Lloyd’s, where the Franchise Board enforces rigorous underwriting and risk management standards to protect the market’s reputation.
Overcoming Implementation Challenges
Adopting EPM is not without hurdles. Deployment costs and the need for some technical expertise can deter some syndicates, particularly smaller ones with lean resources. However, those that do take the leap can see huge benefits to both capability as well as growth and profitability. Integrating EPM with legacy systems and ensuring staff are trained to leverage its capabilities require careful planning. However, the long-term benefits – improved profitability, reduced operational costs, and enhanced compliance – far outweigh these challenges.
Finance leaders can mitigate risks by partnering with proven EPM partners like Bolt Consulting, which offer a variety of cloud-based solutions tailored to insurance needs, with industry specific expertise. Cloud EPM solutions reduce upfront costs, scales with business growth, and incorporates advanced technologies like AI and predictive analytics to keep pace with market shifts. For Lloyd’s syndicates, where agility is critical, this flexibility is a game-changer.
By choosing a partner who focuses on the needs of the business first, before offering a selection across the ‘whole-of-market’ of technology vendors, our clients can be sure of receiving industry expertise, and solutions that truly fit into your ecosystem.
A Strategic Path Forward
For senior finance professionals in Lloyd’s, EPM is more than a technology – it’s a strategic enabler. By streamlining premium planning, EPM ensures syndicates price risks accurately and capitalise on market opportunities, such as the “new golden era” of heightened premiums described by JP Morgan Cazenove. By bolstering risk management, it safeguards capital and supports Lloyd’s commitment to sustainable profitability.
As the market navigates an increasingly complex risk landscape, EPM empowers finance leaders to make data-driven decisions, align underwriting with financial objectives, and deliver value to investors and policyholders alike. In a market as dynamic as Lloyd’s, where discipline and foresight are paramount, EPM is not just an investment – it’s a necessity.
Interested in learning more? Contact us to find out more today, and book in a no-obligation chat with our EPM and insurance market experts today.
