The survey, which is based on responses from 30 Managing Agents representing approximately 55% of the Lloyd’s market.
From the results of the survey we can see there has been a 19% reduction in the number of Lloyd’s Managing Agents managing ‘up to 100’ binding authority contracts. Conversely, there has been a marked increase in those taking on ‘between 100 and 200’ and ‘between 200 and 300’.
Despite historical worries around resource, the number of respondents rating their organisations DA management capability as ‘excellent’ has nearly doubled since the last survey in 2017, which is encouraging.
There is also a significant increase (up 21%) in the number of Lloyd’s Managing Agents who believe that the introduction of the 2017 LMA Scope template has improved the quality of audits of cover holders.
Additional key findings include:
• While a promising number of Lloyd’s Managing Agents are reporting to their audit committee on a ‘quarterly’ or ‘monthly basis’, nearly a third (30%) said ‘never’
• Surprisingly, there has been a reduction in ‘monthly’ reporting to the risk management department on DA associated risks, with a significant increase in ‘quarterly’ reporting suggesting greater confidence in the controls
• 60% believe AiMS has had a positive impact on the audit co-ordination process, while 57% of those surveyed will be using AiMS for third party administration (TPA) instructions in the future
• Quality of MI is an area for consideration as we can see from the results there is a ‘Needs Improvement’ of 54% and ‘Poor’ of 13%. This is a new question for 2019 and it will be interesting to see how the results of this change over time
• Following the recent implementation of DA SATS, many respondents (66%) are unsure as to whether it will be an improvement for all stakeholders – which we would expect given it is still early days
Also, as outlined in our survey there have been a number of key initiatives since 2017 and also currently underway which we believe we continue to have a positive impact on the management of DA activities.
Michael Campbell, Delegated Authority Director, UK at Mazars said: “DA is a highly specialised area of the Lloyd’s insurance market, and one that is going through an incredible amount of development and change.
“This year’s survey has produced some very interesting insights, both positive and potentially worrying, with challenges for this sector of the Lloyd’s market. Some of these can be identified as on-going trends and show that, whilst good progress has been made to improve the audit and DA systems generally, more still needs to be done.
“The fact that a large portion of respondents are struggling with resources in their DA teams is something for further discussion, while it is encouraging to see confidence in organisations’ DA management capability growing considerably and developments such as the 2017 LMA Scope template and AiMS appear to have had a really positive impact”.
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