London Bridge has supported £2.2bn of new capital entry to Lloyd’s: Tiernan

The Lloyd’s market continues to see strong investor appetite for access to the insurance and reinsurance linked returns that the market can generate and its London Bridge 2 insurance-linked securities (ILS) structure has become a key conduit for funds to enter the market, CEO Patrick Tiernan said today.

It appears activity for the London Bridge 2 PCC ILS style transformer vehicle continues to build, with reported figures coming out during Lloyd’s first-half results today suggesting there have been more transactions in recent months.

The London Bridge 2 PCC is the most prolific UK insurance-linked securities (ILS) structure in activity terms and there’s perhaps no surprise, as a lot of the UK’s original ILS legislation was designed with one eye on the Lloyd’s marketplace.

Previously we had reported that in 2024 the London Bridge 2 PCC structure saw 19 individual cells established within the vehicle, to support third-party capitalised reinsurance and risk transfer funding arrangements for Lloyd’s market participants.

Those arrangements resulted in US $1.9 billion of capital deployed through London Bridge 2, and there had actually been $2.5 billion of capital committed to the structure last year.

Since then, Deputy CFO of Lloyd’s, Alexandra Cliff said in March that the pipeline for the London Bridge platform remained healthy.

Comments from Lloyd’s CEO Patrick Tiernan suggest that the pipeline for London Bridge 2 PCC deals is being executed on as well, with the total volume of capital flowing through it having risen further.

Tiernan said today that, “Investor appetite for innovative reinsurance structures remains strong.”

He explained that there has been , “£2.2bn of new capital coming through London Bridge 2 supporting new sidecar-style syndicates and reinsurance start-ups at scale.”

UK £2.2 billion is a meaningful increase on the figures from 2024, suggesting more reinsurance risk transfer and funding activity is being completed through the platform than is visible to us.

Tiernan highlighted the launch of Oak Re as one recent example, where London Bridge 2 was used to bring new capital in.

But, since then, we’ve also seen the £140 million London Bridge 2 PCC Limited (Vision 2039 – 2025-1) catastrophe bond, which was the first cat bond for UK flood reinsurance pool Flood Re and also marked the first use of the London Bridge 2 vehicle for an insurance-linked securities (ILS) arrangement by a non-Lloyd’s entity.

That showed the flexibility in London Bridge 2, that it can also be used by an entity which is not underwriting in the Lloyd’s marketplace, so effectively serving as a transformer structure.

In addition, in 2025, we saw the $100 million London Bridge 2 PCC Limited (Lapis 2025-1) catastrophe bond for Brit.

As well as this, there have been reported to now be eight Lloyd’s managing agents using the London Bridge 2 structure as a mechanism for sourcing third-party reinsurance capital to support syndicates and members in the market.

The London Bridge platform continues to deliver on its promise as an efficient platform for risk and capital matching, into and out of the Lloyd’s market. It enables investors to access the returns of the insurance marketplace, while market participants can access efficient institutional reinsurance capital sources.

It’s perhaps also worth noting that in his CEO statement with the Lloyd’s results today, Tiernan also highlighted some concerns about market softening.

“Premiums in certain lines are falling at a concerning rate. In a market with elevated risk, reinvestment of profits and top-line targets are having a softening effect in certain wholesale-dominated sectors of the market.

“The quality of underwriting decisions, especially among the market’s top-performing syndicates, has been maintained. But the quality of earnings must also be maintained. At Lloyd’s, underwriting discipline and vigilance are fundamentals to ensure sustainable returns; this is at the centre of our principles-based oversight regime,” Tiernan said.

As Lloyd’s attracts new sources of capital through increasingly fluid and perhaps in future fungible routes, such as London Bridge 2, while Tiernan says this can “strengthen the market” there must also be a watchful eye on discipline, of which the Lloyd’s market remains ever aware.