To coincide with ANZIIF’s new short course on Lloyd’s of London, we explore the function of a coverholder within the global market.

Tesh Patel has spent the past 20 years travelling the world, taking on a variety of roles within the insurance sector. Yet it is only in the past 18 months — since he became managing director of Lloyd’s coverholder, Delta Insurance Australia — that he feels he has gained a whole new level of understanding about how the global industry operates.

“Lloyds is not an insurance company like I have been used to in my career, but a marketplace with managing agents and syndicates, and their own brokers,” he says. “As a coverholder, you may be partnering with different managing agents across a range of products, which can allow you to offer excellent solutions to your clients.” 

Established in 2022, Delta Insurance Australia is a specialist underwriting agency. It is the newest addition to the Delta Insurance Group, which launched in New Zealand and Singapore in 2014 and 2017 respectively.

As a Lloyd’s coverholder, the company represents several managing agents. 

“Managing agents are insurers, for all intents and purposes, and their role exists to manage syndicates within Lloyd’s, which are the vehicles that carry the risk,” explains Patel. 

“For example, my organisation offers professional risks and casualty products; we underwrite risks on behalf of Lloyd’s managing agents in this country and we undertake most tasks that a client would associate with an insurer, such as business development, underwriting and claims management, as well as developing systems.” 

It is a mutually beneficial arrangement. By leveraging the services of local representatives, managing agents can operate around the world on the Lloyd’s licences, without establishing themselves on the ground. 

The coverholders typically have strong local relationships and market knowledge.They are capable of handling tasks such as underwriting policies, managing claims responses, ensuring adherence to local legislation, and addressing regulatory and compliance matters on behalf of the managing agent.  

“This provides the managing agent access to a country or area without having to set up an operation and can save a significant amount of cost and effort,” explains Patel.

In return, coverholders gain access to the collective intelligence, underwriting expertise, resources, and financial security of the Lloyd’s market. 

“For us, it’s a fantastic opportunity, because we are able to leverage our capacity partners’ global scale and capability, whilst overlaying it with our local knowledge and expertise, enabling us to distribute relevant and competitive products into the local market,” says Patel.

“The local Lloyds team has been amazing since we began operating, assisting us with compliance and regulatory matters. We have gained access to incredible markets with deep global experience and insight, which we could not gain without being a Lloyds coverholder.”

Working for Delta Insurance Australia has been Patel’s first foray into the Lloyd’s ecosystem.

Originally from the UK, he began his career as a graduate trainee for Royal & Sun Alliance Insurance Group (RSA). Though he started out in IT, he soon settled as an underwriter, specialising in professional and financial risks (ProFin). 

After around four years with the company, Patel moved to Singapore as head of the local ProFin portfolio — a role that later expanded to encompass all of Asia and the Middle East.

In 2010, he relocated once more, this time to Australia to launch the professional liability portfolio for Wesfarmers Insurance. When the company announced the sale of its underwriting businesses to Insurance Australia Group (IAG), he remained on board, but moved into portfolio and product management roles.

By 2022, when the founders of Delta Insurance Group were looking to expand into Australia, Patel was keen to try something new. 

“I had always wanted to branch out,” he says. “I think the opportunity to run your own business can be quite financially rewarding, if you get it right. For me, it was more about the opportunity to start something from scratch and build from my own vision.”

A large part of Patel’s current role involves working closely with managing agents — negotiating binders (the terms and conditions under which the agency can write business), ensuring the agency’s partners are constantly updated on how the markets and business are going, finding opportunities to expand the business and deploying the great skill and knowledge the managing agents can provide.

“I love the role because it’s all encompassing,” he says. “It’s running a business but issuing insurance as well. Being part of the Lloyd’s ecosystem is incredible because you have access to extensive training and development. It has enhanced me as a professional in ways I couldn’t have anticipated.”

Arguably, the most important aspect of Patel’s role is relationship-building. 

“When coverholders have a relationship with a managing agent, it’s a long-term partnership to drive business for mutual success,” he says. “I take a huge amount of pride in being their local arm and representing them.”

Being part of the Lloyd’s market has been hugely rewarding for Patel, and he recommends it to any insurance professional wanting to nurture global expertise. 

“Working for a domestic insurer or broker can be extremely rewarding but can often limit your development to local matters.

“If you have the opportunity to work within the Lloyds ecosystem, whether with a managing agent or coverholder, it can increase your skills and experience incredibly. Lloyds has been operating for over 300 years and can provide solutions in over 200 territories. The people who you have access to are some of the most knowledgeable insurance professionals on the planet.”  

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