A Dual-Regulated Firm in a Unique Market

Managing agents are dual-regulated firms, supervised by the Prudential Regulation Authority and the FCA, and subject to the Senior Managers and Certification Regime in the same way as other insurers. Their Senior Manager Functions typically include PRA-designated roles such as the Chief Executive, Chief Finance, Chief Risk and Chief Actuary functions, the Chief Underwriting Officer, the Head of Internal Audit, the Chair and committee chairs, and FCA-designated roles such as compliance oversight. The PRA’s requirements are in the PRA Rulebook.

What makes managing agents different is the market they operate in. Lloyd’s sets its own minimum standards for managing agents covering underwriting, claims, governance, risk management, conduct and operational resilience, and oversees how agents meet them. Lloyd’s also has a role in approving the individuals who run managing agents.

The Three Layers of Oversight

The PRA

Focused on the safety and soundness of the market and its participants, the PRA’s interest in senior appointments centres on capital, reserving, risk management and the board’s collective ability to oversee them.

The FCA

Focused on conduct, the FCA’s interest includes product governance, fair value, claims handling and the oversight of delegated authority arrangements with coverholders and managing general agents.

Lloyd’s

Lloyd’s oversees managing agents’ performance and compliance with its minimum standards, and considers the suitability of individuals in key roles. Its view of a managing agent’s leadership can significantly affect the business plan it approves for each syndicate.

In practice, all three take an interest in the most senior appointments. Candidates need credibility with each of them.

The Roles That Matter Most

Chief Executive

Managing agent chief executives need underwriting and market credibility, the confidence of capital providers and the ability to lead a business under three layers of oversight.

Chief Underwriting Officer

The Chief Underwriting Officer is central to a managing agent’s performance and is a Senior Manager Function in its own right. The role combines technical underwriting leadership with accountability for underwriting controls, performance against plan and the oversight of delegated authority.

Chief Risk Officer and Chief Actuary

Risk and actuarial leaders own the frameworks behind capital, reserving and risk appetite. Their independence and standing with the board are closely watched by the PRA and Lloyd’s.

Finance Leadership

Managing agent finance directors need expertise in syndicate accounting, capital and regulatory reporting to both regulators and Lloyd’s.

Compliance and Conduct

Compliance leaders oversee conduct across a business that often distributes through brokers and coverholders worldwide, with product governance and fair value obligations under FCA rules.

Chair and Non-Executives

Independent board members provide challenge on underwriting strategy, risk appetite and capital, and play a key role in how Lloyd’s and the regulators view the managing agent’s governance.

Planning a Senior Appointment

Allow Enough Time

Regulatory approval can take up to three months once a complete application is submitted, and the most senior roles often involve interviews. Candidates from other managing agents or insurers commonly have long notice periods. Planning should start well before a role needs to be filled. SMF Capital’s guide to how long an SMF appointment takes sets out the stages.

Engage Early With Lloyd’s and the Regulators

For senior roles, early discussion with the PRA, FCA and Lloyd’s can reduce the risk of surprises. Each may have views on the candidate profile and the timing.

Consider Board Composition

The PRA considers the board’s collective suitability. New appointments should be assessed against the existing mix of skills, particularly in underwriting, reserving, risk and conduct.

Check References Early

Candidates in the Lloyd’s market often move between managing agents, brokers and carriers. Regulatory references covering the previous six years should be requested as early as possible.

Delegated Authority and Senior Accountability

Much Lloyd’s business is written through coverholders and managing general agents under delegated authority. Managing agents remain responsible for business written in their name, and both the FCA and Lloyd’s expect robust oversight. Senior Managers responsible for underwriting and conduct need clear management information on delegated business, including performance, claims, complaints and customer outcomes, and must be able to act when a coverholder falls short.

Syndicate Business Plans and Performance

Each syndicate operates under a business plan agreed with Lloyd’s. Senior Managers at the managing agent, particularly the chief executive, Chief Underwriting Officer and finance director, are accountable for delivering against that plan and for explaining variances. Lloyd’s performance oversight can have real consequences for a syndicate’s capacity and freedom to grow, so the quality and credibility of the senior team directly affect the business. When recruiting, firms should test candidates’ experience of planning, performance management and engagement with Lloyd’s oversight.

Consumer Business and Conduct

Much Lloyd’s business is commercial or reinsurance, but many syndicates also write business for consumers and small businesses, often through delegated authority. That business falls within the FCA’s product governance rules and, for retail customers, the Consumer Duty. Managing agents need Senior Managers who understand conduct risk in consumer lines, including fair value, claims handling and the treatment of vulnerable customers, even where the managing agent itself never deals directly with the end customer.

New Managing Agents and Market Entrants

New managing agents, and existing insurers entering the Lloyd’s market, need to build a full senior team and satisfy Lloyd’s and both regulators before they can begin trading. The people named in their applications are central to that approval. Firms in this position should plan their Senior Manager appointments around the application timetable, and expect close scrutiny of the experience of the chief executive, Chief Underwriting Officer and control function leaders.

The Candidate Market

The pool of candidates with Lloyd’s experience at Senior Manager level is small and closely connected. Many senior people are well known in the market, and searches need to be handled with discretion. Firms increasingly look beyond Lloyd’s for some roles, such as finance, risk, compliance and technology, bringing in candidates from the company market or other financial services who can learn the Lloyd’s specifics. Those candidates need a clear induction on Lloyd’s structures and standards.

For chief executive and other C-suite appointments at larger managing agents and insurers, Exec Capital, a sister practice of SMF Capital, runs FCA-regulated executive search. SMF Capital recruits across the Senior Manager Functions, including control function and board roles.

Questions for Managing Agent Boards

• Is our succession plan realistic given approval timelines and the small candidate pool?
• Does our board have the collective skills the PRA and Lloyd’s expect?
• Are responsibilities for delegated authority clearly allocated to named Senior Managers?
• Do we engage early with the regulators and Lloyd’s on senior appointments?
• Are our control function leaders independent and well supported?

The Bottom Line

Senior Manager appointments at Lloyd’s managing agents are among the most demanding in UK insurance, with two regulators and the market itself taking a close interest. Firms that plan early, engage with each layer of oversight, think carefully about board composition and handle searches with discretion are best placed to appoint leaders who can succeed. For more on the Senior Manager Functions involved, see SMF Capital’s designations guide.