Lloyd’s managing agents can write three-year binding authority contracts with coverholders from January 1, in a move to enhance stability and continuity.

Currently, binders cannot exceed 18 months and are usually annual.

Lloyd’s General Representative in Australia Chris Mackinnon told insuranceNEWS.com.au the move represents “a critical change” in how coverholders are handled.

“It is good to come up with a longer-term strategy,” he said. “Annual renewal is always a tense time, and there has certainly been a lot of interest in this development, which will benefit both parties.

“It is an opportunity, rather than a mandatory approach, and there will probably still be regular annual meetings.”

Lloyd’s says the move should also significantly reduce administration.