Auctions

The Lloyd’s capacity auctions are the mechanism for Members to trade their syndicate capacity. Members can buy or sell the rights to participate on a syndicate for the following year according to their own portfolio requirements. This is also the mechanism for new Members to access the Lloyd’s market and is run centrally by Lloyd’s.

The three main auctions occur in September after the Provisional Business Plans for the following year have been published. Each auction lasts for two days during which period Members can make bids or tender offers for syndicate capacity. At the end of the first day Lloyd’s publishes all the bids and offers in relation to a particular syndicate. There follows a further day’s trading and when the auctions are closed, Lloyd’s calculates the results based on a “matched bargain” basis. Members cannot buy and sell the same syndicate in the same year. A final restricted auction occurs in November when the final Business Plans have been agreed with Lloyd’s.

Hampden’s role in the auctions is firstly to advise its Members as to their portfolio allocations. This will include advice on likely bid and tender prices enabling Members to tailor any portfolio changes to their own particular circumstances. During the auction process we will submit any trades on Members’ behalf and advise of the results. Events such as hurricanes can alter the auctions prices overnight and Hampden will make sure that Members have all the information to make the most appropriate auction trades.