News 11 May, 2021 Lloyds Decile 10 nIitiative & Covid-19: The Impact On The Marine Insurance Market We examine the effects that interventions to boost underwriting performance have had – and how, in turn, the pandemic has accelerated businesses’ digital transformation plans.  Download PDF Article by  Andrew Challacombe (Chairman of Marine, Miller Insurance Services LLP) In 2012, Lloyd’s launched a growth and franchise-building (attracting new syndicates) strategic plan called Vision 2025. Over the next five years, total premiums written increased and 15 new syndicates were attracted to the market, many of whom wrote and led a variety of marine classes including Hull & Machinery (H&M). This period coincided with an increased global marine insurance capacity which, in the hands of a greater number of competitors, led to an inevitable pressure on rates. Just as inevitably, the compound effect of softening rates (exacerbated to some extent by the introduction of the new franchises) and of increasing expense ratios significantly reduced underwriters’ profitability, which had been obscured to some extent by some relatively benign catastrophe loss activity.  What is the Decile 10 initiative? In Lloyd’s, a high level of natural catastrophe activity in 2017 highlighted the degree to which underlying underwriting performance had deteriorated, particularly in comparison to its peers. To address this, Lloyd’s Managing Agents were told in 2018 to focus upon the following: Any syndicates that had not been profitable for each of the three previous years; Eight underperforming classes including marine hull, cargo and yacht; The worst-performing 10% of premium for each syndicate – the ‘Decile 10’. They were then to produce detailed remediation plans to return these classes to sustainable profitability and to reduce expenses. Failure to do so would result in plans being rejected and classes of business and syndicates being closed down.  What have these