As Lloyd’s presence in the United States continues to grow, with more than half of the market’s business originating from North America, executives at Argenta Private Capital Limited (APCL) emphasise that investing in the Lloyd’s market presents a logical and underutilised pathway to returns for investors.In a recent article, APCL wrote: “Lloyd’s of London and the United States have long shared a symbiotic relationship built on partnership, trust, and growth.Cuthbert Heath, one of Lloyd’s most celebrated underwriters, cemented this bond with his swift and fair response to the 1906 San Francisco earthquake.“Since then, Lloyd’s footprint in the U.S.

has only deepened: today, more than half of the market’s business originates from North America, primarily the United States.Each year, Lloyd’s pays out over £12 billion in claims to American businesses and communities and remains deeply intertwined with U.S.financial markets.” In addition to its fundamental underwriting capabilities, APCL observes that Lloyd’s also offers a significant investment opportunity, as the market’s long-term performance consistently produces double-digit returns on capital, often exceeding equity benchmarks.

“For U.S.institutional investors, Lloyd’s offers a logical and underutilised pathway, linking capital efficiency with global insurance diversification,” APCL explains.Additionally, Argenta Private Capital also highlights that accessing insurance and reinsurance linked returns from the Lloyd’s marketplace can offer diversification benefits outside of natural catastrophe risks for investors.

The market provides a wider range of underwriting opportunities compared to what you typically find in catastrophe bonds or the majority of insurance-linked securities (ILS) funds.Recognising the value of institutional capital, APCL also highlighted how Lloyd’s has previously developed a series of structures designed that are designed to ease investment entry and enhance efficiency.Among these structures, is the London Bridge 2 PCC insurance-linked securities (ILS) structure, that Lloyd’s launched in 2022, which has captured growing attention from institutional and trade investors worldwide, London Bridge 2 PCC, is a regulated ILS platform for Lloyd’s of London that transforms both insurance and reinsurance risk into investment opportunities for institutional investors.

Moreover, APCL also highlighted that while , London Bridge 2 PCC continues to attract U.S.and global institutional interest, “reinforcing Lloyd’s position as a home for specialty risk capital.” “[London Bridge] gives institutional investors what they’re used to seeing: something that looks and feels like a bond or a debt instrument,” commented Marc Lipman, President of Lloyd’s Americas.Moving forward, APCL also outlines how Lloyd’s provides investors with access to diversified specialty insurance risks that are largely uncorrelated with traditional equity and fixed income portfolios.

“Licensed to write business in over 80 territories, and with reinsurance operations extending across more than 200 territories, Lloyd’s provides international scale, diversification, and resilience amid wider financial market volatility,” the firm explained.“Its distinctive “chain of security” underpins capital protection and operational efficiency.Lloyd’s accepts a broad spectrum of eligible assets (cash, securities, and letters of credit), providing flexible capital management.

This system is ultimately backed by the highly rated Central Fund, enabling underwriting capital to operate with confidence and efficiency.” As well as this, U.S.reinsurers can also directly access the Lloyd’s market by establishing an underwriting vehicle, referred to in Lloyd’s terminology as a Corporate Member.This serves as a facilitator, enabling capital to back one or more syndicates, with either active or passive participation across various specialty risk classes.

“Advised by experts such as Argenta Private Capital or liaising with Lloyd’s authorised brokers, investors can shape their exposure, whether aligning closely with a single managing agent or diversifying across several syndicates.Corporate Members have full access to underwriting returns, flexibility in profit extraction, and can benefit their balance sheet through highly rated income,” APCL added.“Our results have been good and we see value in the long-term opportunity for reliable performance.

As an insurance geek, I am excited about the unique opportunities at Lloyd’s.It’s a compelling marketplace for people in the insurance business,” said Micah Woolstenhulme, Chief Reinsurance Officer, UFG Insurance..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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