Lloyd’s is set to tighten expectations on claims oversight from January 1, 2026, with its existing claims management principle being elevated to a formal “hurdle principle”. The move will place claims service delivery on the same footing as underwriting and governance in terms of core responsibilities for managing agents.
Under the new approach, claims performance will feed directly into how syndicates are assessed and supervised. Managing agents will be expected to demonstrate that their claims operations are structured, well governed and consistently delivering outcomes that meet Lloyd’s benchmarks.
Katie Lamb (pictured above, left), general counsel at Gallagher Bassett, said the new hurdle underscores the link between claims handling and franchise performance.
“Syndicate ratings will be directly influenced by claims handling performance. Failure to meet expectations may lead to a range of consequences, including restrictions on underwriting and increased regulatory oversight. However, high performers can expect to see their maturity ratings and market reputation strengthened,” she said.
For market participants, the change formalises claims as a competitive differentiator rather than a back-office function. Charlotte Harrison-May (pictured above, right), Gallagher Bassett’s head of carrier and market relationships, said claims capabilities are now being weighed alongside underwriting and governance when counterparties assess carriers.
“The industry now recognises claims excellence as an important attribute, equal strategically with underwriting and governance,” Harrison-May said. She acknowledged that in the short term some managing agents may find the higher bar challenging as they adjust processes, systems and resourcing.
The shift comes as the UK market is paying closer attention to how claims are benchmarked and compared.
Market conditions may complicate the transition to the new standard. Aon’s latest UK Insurance Market Outlook points to softening pricing and greater competition, while highlighting that claims inflation driven by repair costs, parts and labour remains a central issue, putting additional pressure on loss ratios.
For Lloyd’s managing agents, that mix of softer rates and elevated claims costs increases the incentive to control leakage and strengthen file handling discipline.
“Managing agents must ensure their practices meet regulatory standards and deliver prompt and fair service to customers,” Lamb said. She noted that demonstrating this in practice will require clear evidence of oversight, quality controls and responsiveness to policyholders.
Previously, the Chartered Insurance Institute’s Public Trust Index has also identified customer service, especially “how claims and complaints are handled,” as a key challenge for the year, linking day-to-day claims interactions to longer-term confidence in the sector.
Against that backdrop, Lloyd’s outcome-focused hurdle principle is expected to push managing agents to show not only that frameworks are in place, but that claims processes are delivering consistent, fair results for policyholders.
“Looking at the bigger picture, a renewed focus on claims performance could be the key point of difference for the Lloyd’s market,” she added. Harrison-May said that the way firms respond to the hurdle could shape broker and coverholder perceptions of the market over the next few years.
