Without intervention, premiums coming into London via delegated authority (DA) arrangements will continue to decline. Since 2016 DA revenues fell by 3.5% according to the LMA, with DA partners increasingly driven to use local markets due to the complexity and cost inefficiencies inherent in London’s existing model.
With a plan to tackle these issues conspicuous by its absence in recent market reform proposals, the LMA established the Delegated Authority Committee (DAC) in September, which then launched project Dare in November. This ambitious project sought engagement with the global DA community in order to re-imagine the future of delegated authority and design a new model.
After six-months of intensive consultation, involving managing agents, coverholders, brokers and other stakeholders globally, the project yielded a future DA vision and strategy. The recurring theme? Data, specifically the need for more useable and ‘single truth’ data, better compliance data and improved data security and protection.
In helping to clearly define the DA vision, the output from Project Dare enabled the DAC to devise a new model capable of addressing these issues and reversing London’s declining DA revenues. The model has been tested against Blueprint Two and the Future at Lloyd’s (F@L) delivery roadmap for DA. Productive engagement continues between Lloyd's and the LMA to further develop the Dare model within F@L. Analysis of Dare’s compatibility with F@L is ongoing and this is likely to involve two-way constructive challenge of both Dare and F@L. Assuming the new model is approved, a joined-up approach between the LMA, Lloyd's and LIIBA needs to be established before it can be implemented.
The LMADAC is also now encouraging all in the DA market to review the body of evidence for Dare at lmadare.com, and register their support for its implementation. The site offers a great deal of additional information and detail and about the project, how it arrived at the solution and next steps. Given the ambition to halt and reverse the drain of business to other markets, for that to succeed it will be essential to avoid handing out more rules for DA partners to adhere to. This has to be, and must be seen to be, the market taking the problem away from them, with any changes necessary easy for them to adopt.
As things progress, it is likely external providers will be sought that can build the new model and make the DA vision a reality. As a long-term supporter of the DA market, Advent has been actively engaged in confronting the challenges highlighted in project Dare since 2016. With a solution proven to produce data that is easy to understand, consistently accurate, accessible, and trustworthy, we will be watching Dare’s development with great interest. Whatever the outcome, the aims of project Dare are to be applauded and we wish the project every success in halting DA premium erosion and restoring London’s competitive DA edge.