Insurance News magazine June/July 2026

Spinning plates

How Patrick Tiernan plans to build on Lloyd’s strengths during some testing times

By Wendy Pugh

Lloyd’s chief executive Patrick Tiernan has visited Australia with a strategy of honing the marketplace’s financial edge – and as its response to a declining premium rate environment is closely watched.

The five-year strategy released in March focuses on underwriting performance, efficiencies, maximising a capital advantage, and innovation and talent.

Mr Tiernan says Lloyd’s strengths and a unique structure – allowing it to shoulder more insurance risk per dollar of capital than other financial institutions – put it in a position to increase market share internationally and in Australia.

“That is a massive power. It gives us about a 33% capital advantage, so we want to make sure we protect it, but that we deploy it as well,” he tells Insurance News.

Mr Tiernan says Lloyd’s has about 7% of the global commercial and specialty market, but those strengths suggest its “natural size” should be at least 10%.

Australia is one of Lloyd’s top three global markets. Business volume worth more than $5 billion is mostly from commercial classes, with retail including high net worth risks or catastrophe-exposed property providing a smaller contribution.

Mr Tiernan says after meeting Lloyd’s service companies in Sydney that customer satisfaction and retention levels around their specialty and non-standard offerings supports their prospects, notwithstanding a softening market trend.

“Nobody can afford to leave margin on the side, so people are going to be more and more deliberate about how they structure their distribution and how they get value,” he says.

Lloyd’s global wholesale arrangements – which allow capital and new products to address demand not otherwise met in domestic markets – works well in Australia and has supported an increase in business.

“If it becomes a little bit more commoditised, if it is a little bit more mainstream in terms of the covers, that tends to be when it becomes a bit more domestic,” Mr Tiernan says. “There’s a natural life cycle, and I think it’s incumbent on the specialty players to remain special. You’ve got to keep inventing.”

Lloyd’s also wants to attract leading underwriters from around the world to the market, with advantages including access to different forms of capital and international licences that provide pathways in many countries.

“It’s really important to us that we do have the best underwriters in Lloyd’s, because that attracts business and drives growth, but it also drives discipline into the market,” Mr Tiernan says.

“When I’m down here in Australia, I am talking to all of the great underwriters that we do have on the platform, but also those that we don’t.”

Lloyd’s chief of performance and strategy Rachel Turk warned in a second-quarter market message that premium rates are coming off faster than expected and “without deliberate and definitive action, adequacy for 2027 is coming under threat”. She urged discipline and attention to margins and expenses.

Mr Tiernan says Lloyd’s focuses on adequacy in both rate and terms and conditions, with broad-brush hard or soft market descriptions too binary. He vows no repeat of the sweeping Decile 10 mandate, which caused distress during the last pricing slump as managing agents exited the bottom 10% of their books.

“This will be the first time we will have managed a market with moderating rate in our new principles-based oversight regime,” he says.

“People would have been used to Decile 10 in the past and those sorts of measures, which while necessary were blunt and actually damaged distribution relationships across the world, so they’re looking to see, what is Lloyd’s going to do this time?”

He says Lloyd’s will “spin four plates simultaneously” as it focuses on delivering a combined operating ratio of less than 95% over 10 years and protecting an S&P Global AA- rating.

Participants with a strong track record will be able to pursue their plans; Lloyd’s will welcome new rate-adequate business; it will also support innovation; but anyone chasing growth through price cutting faces intervention. Conversations are taking place early.

“For them, they won’t be deciled 10, it will be a total conversation with the Lloyd’s performance management team about their business going forward,” Mr Tiernan said.

“They need to underwrite in a way that’s consistent with a sustainable profitable market.”

Mr Tiernan, who became chief executive last June, says the response to the five-year strategy and seeing those within the corporation “standing taller” has been a highlight of his first year.

Challenges have included a backlash against comments on Lloyd’s approach to fossil fuels.

Mr Tiernan says he clarified that the market is apolitical and doesn’t have the jurisdiction to differentiate between energy forms. “I thought that we would benefit from being very clear on topics that we’ve been a little bit equivocal on in the past.

“There was a bit of negativity around that, but I think it was the right thing to do. We can’t afford a market like Lloyd’s to be unpredictable, so we’re going to be predictable and transparent and consistent even when it’s difficult.”

Mr Tiernan says Lloyd’s history, across more than 300 years, includes insurance firsts in motor, satellite, aviation and cyber, and it’s well placed to cover emerging energy projects as technologies evolve.

“As Lloyd’s, we won’t be able to ban our way to progress, but we can innovate our way to progress, and we’ve been good at it.”

Another pillar of the strategy includes attracting the next generation of new and diverse talent, while Lloyd’s is drawing a curtain on the global Dive In festival, which for a decade has raised awareness about the importance of diversity and inclusion. This year’s event, in September, will be the last.

Lloyd’s has said it will consult with brokers, managing agents and other stakeholders on a “new direction” for culture, skills and talent, and a program for 2027 and beyond.

“Dive In, notwithstanding its success, is a moment in time as a three-day global event. We actually need to make sure that it is permeating through the business at all times, so we’re not stepping back in any way, shape or form,” Mr Tiernan says.

The event has raised awareness, but the next step is looking at “what actually moves the dial” and Lloyd’s, in considering where it can uniquely bring value, will focus on the talent it can bring into the marketplace, he says.

The graduate intake will double from next year and Lloyd’s plans to offer training and opportunities for people to build leadership capabilities and maximise their career potential in insurance.

Attracting the best talent is critical, with innovation central to Lloyd’s ambitions, including enabling capacity at a scale necessary to address some the world’s most pressing issues.

“I don’t see innovation being just product innovation going forward,” Mr Tiernan says.

“I think it’s innovation at a much broader scale, that you must have line sizes commensurate to the risks, you must have syndication and a spreading of the risk, because these are nascent risks, we won’t have all the data.”

Global investments in artificial intelligence, new forms of energy and other emerging areas require the insurance sector to speed innovation, and Lloyd’s needs to continually assess its ability to meet the needs of the real economy, taking into account where investment dollars are flowing, he says.

Australian government and business conversions with Lloyd’s often feature infrastructure projects, the energy mix and energy security, plus local defence and manufacturing capabilities, while data centres are also opening. All must address a range of risks.

“Making sure we can meet that demand, and we’re relevant, and we have the scale to actually provide solutions in those spaces, is very important,” Mr Tiernan says. “The opportunity for expansion is great, while maintaining that underwriting discipline.”

‘Our industry picks people up when they’re down’

Patrick Tiernan first became involved in the insurance industry while visiting Australia in the tumultuous period after the 2001 HIH collapse. He participated in the liquidation process as an adviser to the provisional liquidator in the area of reinsurance restructuring, seeing the effect of the failure on people’s lives and businesses, and the anger it provoked. He also gained an appreciation for the place of insurance here and more widely.

Plans for a short visit extended into a three-year stay, laying the foundations for a career that has taken him to the top of the industry’s most storied institution.

Mr Tiernan, originally from Ireland, joined Lloyd’s as chief of markets in 2021. Previously, he held senior roles at Aviva, StarStone and Zurich in New York and London.

“As I learnt insurance more, I could see the connectivity between what we do as an industry and the public progress and growth and just advancement of the populations that we live in, and that all culminated in turning up at Lloyd’s,” he says.

“It’s not something we talk about on a daily basis, but I get excited about the fact that we as an industry can really drive economic progress, we can drive societal progress, we can sort of pick people up when they’re down.”

In June last year, Mr Tiernan wrote on LinkedIn that he was grateful for the privilege of walking past the Lutine Bell in the Lloyd’s underwriting room as the new chief executive –and that he could still walk at all.

A routine check-up before his 50th birthday had led to the discovery of a spinal tumour that threatened the use of his legs. After a leave of absence in 2024 for surgery, he had to relearn how to walk and returned to work with some anxiety.

“The biggest challenge, actually, coming back was the embarrassment factor that some part of your body would malfunction in front of relatively public audiences,” he says.

The return was made easier by a supportiveness he says is a feature of the insurance industry, which he describes as another family.

“I’m not sure that happens in every other industry,” he says. “It seems very unique to insurance.”