The Lloyd’s market has been instrumental in pioneering new ceded reinsurance vehicles, but what are the prospects for continued growth?
According to Lloyd’s CFO Jim Bichard, London Bridge II still only accounts for £3bn of capital, compared to the wider $120-$140bn alternative capital market of cat bonds and collateralised reinsurance.
Bichard told Behind the Headlines that the opportunity for continued expansion is therefore significant, and now several major insurers have launched ceded reinsurance syndicates the “spell has been broken”, meaning more will follow.
Speaking during the Rendez-Vous de Septembre, Bichard also reflected on Lloyd’s recent H1 results, and the Corporation’s attitude to 2027 business planning.
And in his week’s news discussion, Insurance Insider editor Fiona Robertson delivers her key takeaways from meetings in Monte Carlo.
This transcript was generated using AI and may contain errors. Please check against the audio before quoting.
Sam Casey: Hello and welcome to Behind the Headlines, brought to you by Insurance Insider. I’m your host Sam Casey, and today’s episode is packed full of discussion from the Rendez-Vous de Septembre in Monte Carlo, the industry’s premier reinsurance event. During the conference, I sat down with Lloyd’s of London chief financial officer Jim Bichard, who joined the Corporation earlier this year. As well as discussing Lloyd’s recent half-year results and the outlook for business planning, our conversation focused on the new ceded reinsurance vehicles springing up at Lloyd’s, which link major insurance companies with alternative sources of capital. Jim explained to me why these new structures are proving so attractive for capital providers.
Jim Bichard: I think P&C insurance and reinsurance is hugely diversifying for these groups. They’ve got a lot of assets to put to work. They’re looking for opportunities to get a return and they’re underallocated to P&C insurance. So things like London Bridge II are a fantastic way to deploy a good chunk of capital quickly and get access to what’s actually a very favourable return environment.
Sam Casey: First up, I’m joined by Insurance Insider editor Fiona Robertson for her takeaways from Monte Carlo. Fiona, thank you for coming on the show.
Fiona Robertson: Always a pleasure, Sam.
Sam Casey: So we’re both back from the Rendez-Vous de Septembre in Monte Carlo, where we send a big contingent of Insurance Insider journalists and the wider team. It’s always considered a bellwether conference for the industry, especially in the reinsurance world. Why is that, and why do we get so much out of going over there as journalists?
Fiona Robertson: I think it’s because so much of the focus is on the one-to-one meetings and networking. So it’s not your typical conference. It’s brutal, but it’s also efficient in terms of how many people you can see. It really does become a little reinsurance bubble where nothing much else exists other than the reinsurance news you’re trying to follow. That’s why so many people go year after year, and why it becomes the place to see and be seen. And that’s why we want to be seen there as well.
Sam Casey: There’s always discussion and themes emerge during the conference. Is it fair to say that this year the dominant subject turned out to be ceded reinsurance structures and private capital flowing into the reinsurance market?
Fiona Robertson: Yes, I do think so. We’re seeing a new type of alternative capital come into the market, where investors are interested in working the investment side of their assets as well as taking some underwriting risk. They’re doing somewhat different vehicles than your typical ILS investors. So, like you said, we’re seeing ceded reinsurance vehicles but also casualty sidecars, MGA sidecars and those longer-tail vehicles, which is a new development. I think that was one of the key talking points. And it was quite nice for us that it was kick-started by one of our scoops on the potential Aon and Blackstone vehicle that’s in discussion right now.
Sam Casey: Everyone likes innovation, and a lot of this is taking place in the London market specifically, which is good for the area we cover. But it also creates some tension with the traditional reinsurance market. What sentiment were you picking up around that?
Fiona Robertson: I think there is tension. There’s also an element of acceptance, and people trying to keep the trend in proportion to how much capital is actually coming in, or pointing out that it might only be the largest cedents who are suitable for this kind of vehicle. But it is taking premium out of the market, so that’s obviously a concern for reinsurers. The Aon and Blackstone idea is a very new concept in itself. We’ve seen so much facilitisation in the primary market in London already, but this is completely new for the reinsurance market. So that obviously stokes more competitive tension and conversation.
Sam Casey: Whenever you ask reinsurers at this conference about the trajectory on rates and pricing, they always like to say it’s too early. But people do talk about it and you get a hint behind the scenes. What impressions were you picking up? More market softening?
Fiona Robertson: Yes, definitely. At this point we haven’t even had a hurricane this season. You never know what’s around the corner, but it would have to be something very surprising to put the market off course. There’s just so much capital interest. Reinsurers may be starting to moderate their growth appetites, but there’s still enough confidence in the business they’ve been writing that a slowdown in appetite isn’t going to balance out the buyer’s market we have. Some buyers are looking for more cover or trying to make the most of what they’re spending, but ultimately rates will be going down. It’s just a question of how much. One of the broking firms put out a figure of around 10% down ahead of the event, which would be a slower pace of reductions than this year. What will be really interesting is not just the rate conversation but where the pressure starts to emerge on terms, conditions and structures. It was very hard to get a sense of what people might be prepared to give on. You might see some buy-downs, but maybe only some reinsurers will do them. Reinsurers are very keen to keep deductibles where they have been. It’s going to be an interesting few months as we get closer to 1/1.
Sam Casey: And we had a surprise announcement on almost the last day of the conference, when many people were trying and failing to catch flights amid the air transport chaos. The start-up reinsurance broker Willis Re has a new CEO, which has been long awaited. What did you make of that?
Fiona Robertson: It was a surprise. We’d gone into the conference thinking maybe they’d announce it there, and by Wednesday morning we were thinking it definitely wasn’t going to happen. The sequencing around Neil Eckett leaving Conduit Re must have played a role in the timing. He’s got a very long history of entrepreneurship in the market, so it seems Willis Re wanted somebody who could come in with that creator mindset rather than picking someone from an established rival, as we had perhaps expected. I believe he won’t be starting until March, but once he’s on board I’m sure it will be full steam ahead.
Sam Casey: Super. Fiona, thanks for sharing your thoughts.
Fiona Robertson: Of course.
Sam Casey: Jim Bichard joined Lloyd’s of London earlier this year after a long career in insurance consulting. He joins the Corporation at a fascinating time, given the amount of change and innovation taking place in the London market. I’m delighted to be joined by Jim now. Jim, thanks for coming on the show today.
Jim Bichard: Thanks for having me.
Sam Casey: You joined Lloyd’s as CFO in April 2026, in the middle of a big war in the Middle East, which is a major event for Lloyd’s. We’ve also got softening going on in the market. I’m sure it’s been a pretty hectic period. How have you found it so far?
Jim Bichard: I’ve absolutely loved it. I really enjoyed my time at PwC and felt lucky to have had that experience. Running the global insurance practice in particular gave me the chance to travel a lot and see different parts of the insurance and reinsurance market. But this has been an amazing experience so far. I’ve been so grateful for the support and the amount of interest and activity within the Corporation and the market. I’ve made it a priority to get out and see market participants and current or future investors, so I’ve had a lot of meetings since I joined. The positivity about Lloyd’s has been overwhelming, and so has the welcome and support I’ve had since starting.
Sam Casey: Tell us a bit more about what you were doing before you came to Lloyd’s. As you said, you rose through the ranks in the insurance practice at PwC.
Jim Bichard: Like most people, I didn’t pick insurance. It found me. I was allocated to it, thought it was fascinating and never stepped away. I did lots of different roles in the firm and was very fortunate to have some great mentors and sponsors. I worked in New York for five years, which is one of the great advantages of working for a big firm where you can move around. That was an amazing experience. The US is such a massive insurance market, so having that knowledge is very valuable. If you’ve worked in insurance in both London and New York, I think that’s a good base. I worked on the audit side and then moved more and more into advisory. For the last five years I was leading a global insurance practice, which meant dealing with the firm’s biggest clients around the world and seeing all the practices globally.
Sam Casey: In a sense you must be dealing with a lot of the same clients now in your current job, just in a different way.
Jim Bichard: I am. There’s a nice overlap, although there are a lot of people I didn’t interact with before that I’ve now got to know, and different types of people too. Before, I might have been dealing with people focused on the change side of the business. Now it’s much more about how they do business with Lloyd’s, and much more on the investment side. So that was a very useful foundation. Ultimately Lloyd’s is a global brand, even though we’re based in London, so knowledge of international markets is really valuable.
Sam Casey: Lloyd’s is a unique organisation, so being its CFO is a unique role. It’s not the same as being CFO of a balance sheet carrier. What attracted you to it, and what do you think the role of CFO can achieve for the Corporation?
Jim Bichard: What attracted me is that it’s a global brand. It was a UK-based role that still had a very global feel. A lot of insurers based in the UK have more of a UK footprint, so that was really interesting. I also think Lloyd’s is at a really important time in its cycle. The strategy was released just before I joined. They were working on it as I was going through the process, and I knew it was going to take us in a different direction, which was really exciting. I’d worked on some of the new London Bridge vehicles as an adviser, so I knew what an exciting opportunity that was and how big a part of the growth story for Lloyd’s it could be. Having the chance to be on the inside and support that was another big draw. And it’s been great working with Patrick and the whole team, because there’s a lot of energy about where they want to take Lloyd’s in the next phase.
Sam Casey: You mentioned the new Lloyd’s strategy. One key pillar is championing and continually improving the capital advantage of operating at Lloyd’s. Can you explain what that advantage is and what you’re doing to further it?
Jim Bichard: It’s funny. Patrick always calls it the best-kept secret, and it surprises me how many current market participants still don’t fully appreciate the advantages they could already enjoy. Then there are lots of people interested in coming into the market. So I spend a good chunk of my time talking people through the things they could take advantage of. Fundamentally, we get the benefit of being a big mutual organisation, so there’s the pooling concept and the way risk is shared. We say you can shoulder more risk per dollar of capital at Lloyd’s than anywhere else in the world. The capital needed to operate at Lloyd’s, with the ratings we enjoy and the global licence framework, is somewhere between 30% and 40% less than if you held it on your own balance sheet. So the first point is the amount of capital. You can make that even more efficient if you have a diversification benefit at member level. The form of that capital can also be much more geared, with up to 50% held in letters of credit. So you can hold less capital and hold it in instruments that generate a better return. On the other side of the balance sheet, the investment guidelines are a lot more generous than people appreciate. The asset allocation you can use to back your underwriting lets you take a bit more risk on the asset side too. Then there’s what London Bridge gives you on top. Taken together, the package is really compelling. Very few current market participants make the most of every single part of it, and when I explain it to new participants they’re pretty blown away. So I suspect talking about it, explaining it and helping people make it work for them will be a never-ending part of the role. The other thing I want to do is keep improving it. Could it be better? Could it be more sophisticated based on what investors need? It’s already a great advantage, and as you can tell I’m pretty excited about it. But I’d like to leave Lloyd’s with an even stronger balance sheet. We’ve got to defend the fortress balance sheet, as we call it, but also keep working on that capital advantage.
Sam Casey: Looking at the calibre of global reinsurers establishing a footprint at Lloyd’s, it seems that message is filtering through pretty successfully.
Jim Bichard: I think that’s right. They like the efficiency, and the rating they get is very high. So much business comes through Lloyd’s and the distribution is phenomenal. We want the leading underwriters, the best players in their field, whether that’s a particular line of business or a particular geography. I think they’re also pleasantly surprised by how easy we are to do business with, and that’s a big focus for me. I came from a client service mindset, and ultimately Lloyd’s exists to serve the market. So we’ve got to be a bit faster, a bit more responsive and more flexible. Rather than a simple yes or no, it’s more about working with people. In the conversations I’ve had since joining, people have been pleasantly surprised by that, which is great.
Sam Casey: Our listeners won’t be able to see this, but we’re speaking in the splendour of a very nice hotel in Monte Carlo at the annual Rendez-Vous. What are you looking to get out of these few days of meeting people from across the global market? What message are you trying to get across, and what are people talking about?
Jim Bichard: We issued our results for the market this week, so it’s been busy, and that’s usually the first topic of conversation. We talk about the premium growth we’ve seen, which I think is a great sign of the relevance I mentioned. We’ve got more new entrants and existing syndicates growing their footprint. We talk about the results, and some caution is needed there because even though results are solid, there are definitely signs that rate reductions are feeding through into the underlying loss ratio. We also talk about the strength of the balance sheet. We’ve got great balance sheet strength and a lot of healthy margin. Then there are a lot of London Bridge II conversations, because this is the time of year when participants start looking at their reinsurance placement. They’re looking at their book and their portfolio, and I’m happy to say London Bridge II is increasingly part of those conversations as a place where carriers might look to place some of their reinsurance.
Sam Casey: Looking at the broker reports that came out last week setting the scene for the reinsurance renewals, a recurring theme is that the softening of last year may be easing a little. There will still be some softening, but now is a real opportunity for cedents to explore new and innovative things they can do with capital. One of those is the new arrangements at Lloyd’s that people have been exploring, the internal reinsurance syndicates. That seems like something genuinely unique to Lloyd’s globally.
Jim Bichard: I think it’s a great piece of innovation. Three years ago it didn’t exist. As I said, I was involved on the other side and could see the potential. It’s a great new part of the market and it’s great that carriers want to explore it. It’s also a fascinating way to bring insurers closer to institutional investors and private capital. A lot of them are doing it because, as well as being a smart way to manage their capital, it builds a strategic partnership with an investor. Someone asked me yesterday how many of those investors are here. Five years ago you wouldn’t really have had private equity or investment banking professionals at quite a niche event in Monte Carlo. But now there are a lot of them, and for good reason. They’re actually doing business here. It’s not educational, it’s trading. That’s a really important part of the market. I think it adds discipline and diversified capital. A big part of my week is talking to those parties as much as to traditional ones.
Sam Casey: What’s the outside view of the Lloyd’s market from those capital providers? What’s been driving that interest?
Jim Bichard: Let’s be honest. I remember being here a few years ago, probably in 2021, talking about how the reinsurance industry hadn’t met its cost of capital. We’re in a very different place now. Here we are in 2026, and Lloyd’s has just reported a return on capital of more than 20% for the fourth year in a row. That’s why they’re here: the returns. P&C insurance and reinsurance is also hugely diversifying for these groups. They’ve got a lot of assets to put to work, they’re looking for returns and they’re underallocated to P&C insurance. So things like London Bridge II are a fantastic way to deploy a good chunk of capital quickly and get access to what’s a very favourable return environment, certainly for the time being. They’re fascinated by it. They’ve done their diligence and understand this isn’t just about nat cat. It’s much more than that. In all the investor conversations I have, they’re really interested in doing more.
Sam Casey: I think sometimes in the wider community that isn’t involved, Lloyd’s can still be seen as a slightly arcane, niche British institution.
Jim Bichard: I think we’ll always have some of that, and in some ways there’s an appeal to it. The fact that it’s a relationship business is really important. Operating face to face over the long term is the glue that holds us together in tougher times. But I think we’re shedding the sense of bureaucracy and rules pretty well. A lot of these investors have taken the time to understand what Lloyd’s is and what it isn’t. And when I say Lloyd’s, I mean the broader London market and the global market too. They appreciate the good things and they’ve probably dispelled some myths about things that belong in the past. So I feel it’s much better understood now. Continuing that education and bringing people into this fascinating market is another big part of my role.
Sam Casey: So we should keep our eyes peeled for more of these vehicles set to launch.
Jim Bichard: I think they make a lot of sense. The reasons for doing them in the past are still good reasons. The pricing environment is clearly different from two years ago, so you have to work a bit harder for the return and probably can’t expect what you’d have got back then. But that’s true across the board. It’s still positive and still diversifying and uncorrelated for a lot of these investors. A big part of it is also that they’ve seen it in action. Once a couple of people do it and others see how well it performs, that’s a huge incentive, whether you’re a carrier watching another carrier or an investor. So I think the spell has been broken, if you like. Should we expect to see more? If you look at the alternative capital market across cat bonds and collateralised reinsurance, it’s a $120bn-$140bn industry. London Bridge II is still £3bn. We’ve got a long way to go before we’re anywhere near that size. If we want to be more relevant, that’s part of the answer.
Sam Casey: Lloyd’s reported another set of very strong results this week, but the market is naturally in a softening phase. What’s Lloyd’s role in managing that changing market dynamic?
Jim Bichard: This is probably one of the more hands-on parts of the cycle for Lloyd’s. Ultimately we’re there to approve or not approve business plans, but the best way is for businesses to manage the cycle themselves. You’ll hear Rachel talk a lot about cycle management. The first question is always how you’re going about cutting areas where you don’t feel the rate is adequate, or being more selective. That comes before we start to intervene. For some players it may not feel too different because they’ve already done that themselves, and with others we’ll probably be a bit more hands on. But the level of analysis and scrutiny is going to be high, because we know rates are generally under much more pressure than they were in the last couple of years.
Sam Casey: One of my colleagues wrote a piece recently on market dynamics, with the theory that data and analytics have improved so much compared with previous cycles that problems can be spotted earlier. There’s nowhere to hide and fool yourself in the way there maybe used to be.
Jim Bichard: We would hope so, but history suggests we still don’t fully learn all our lessons, and there’s a bit of supply and demand economics in there too. But even in the short time I’ve been there, I can see how much data and history the performance teams can draw on to assess business plans. That’s the starting point of every conversation. You think you’re going to achieve this result, and here’s either your data or broader market data that supports it, or some alternative views. So it’s always a very fact-based, data-led conversation. I would hope that helps dampen this part of the cycle. If we turn what would otherwise have been a 98% into a 97%, or whatever it may be, we’ll have done our job. The teams are taking it very seriously, and we’re just at the beginning of that process.
Sam Casey: Is that whole process something you get involved in much as CFO, or is it more Rachel’s team?
Jim Bichard: It’s more Rachel’s team, but when we get to capital planning, the output is a business plan and a capital number that goes with it, so I’m part of all those conversations. I’m also an active part of the conversations on any new entrants or new syndicates, including London Bridge, as the London Bridge team sits in my team.
Sam Casey: I can’t expect you to give any names, but is there still a pipeline of new entrants we’ll be seeing at Lloyd’s?
Jim Bichard: It’s a great pipeline, and it’s exactly in line with our strategy. There are a good number of leading underwriters wanting to do more business at Lloyd’s, change the shape of their portfolio at Lloyd’s or bring reinsurance in. There are also a good number of innovative, agile start-ups, either in niche lines or new ventures with experienced management teams. That’s exactly what you’d want. You want some innovation, new ideas, new lines of business, new structures and new ways of bringing insurance into the market. Then you want the best underwriters with the best track records. So it’s a very good slate. Now’s the time when the rubber hits the road in terms of structuring and getting capital.
Sam Casey: What are your key priorities over the next few months? What are you most hoping to achieve?
Jim Bichard: Supporting that process from a capital point of view. The balance sheet is in great shape, but we’ve got to keep a really close eye on it and make sure it stays that way. The conflict in the Middle East is still ongoing, so we’ve got to make sure that’s properly reserved. We’re also always keeping an eye on casualty. It’s not a big part of the Lloyd’s portfolio, but it’s a difficult one and history hasn’t been kind to it, so my team will be focusing a lot on that. Otherwise it’s continuing the conversations about this year’s potential new entrants and thinking about how we really make the most of next year. I’m looking to evolve. If we’re still talking about the same London Bridge structure in a year or two’s time and we haven’t developed it further, that would be a shame. I think that would be a missed opportunity.
Sam Casey: It sounds like there’ll be plenty for us to report on at Lloyd’s over the next few months. Jim, it’s been great to speak today.
Jim Bichard: Thanks for the opportunity. Thanks, Sam.
Sam Casey: That’s all for this episode of Behind the Headlines. We’ll be back again in two weeks’ time.