Category: Claims handling · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed 2026-06-11
Open-market claims are claims on policies placed in the open London Market — through a broker presenting the risk to multiple underwriters and assembling participation — as distinct from binder, lineslip or other delegated-authority placements.
Open-market placement is the traditional London Market underwriting model: the broker walks the risk around the market, finding underwriters willing to participate, until 100% participation is achieved. Each placement is individually underwritten with its own terms. The resulting policy is a slip with multiple subscribed participants.
Open-market claims are handled under the Lloyd’s Claim Scheme with the leader (the most prominent participant or the syndicate that took the largest line) playing the central role.
The framework includes:
Open-market business is the heartland of the Lloyd’s market. The discipline of individual underwriting produces a high quality of risk understanding and (typically) of claims handling.
Open-market claims follow the standard slip-claim mechanics:
The broker notifies the leader. The leader’s claims team handles substantively. Followers participate through the bureau. Settlement is processed through the bureau accounting.
The distinguishing feature of open-market business is that each placement is individually underwritten. The slip’s specific terms — wordings, exclusions, conditions — were negotiated for that placement and may differ from market standard. Claims handlers need to read each slip carefully; assumptions based on market standard may not apply.
For complex open-market placements (energy, marine hull, large casualty, D&O), the slip’s terms may run to many pages with bespoke wordings. The leader’s claims team is typically organised by class with subject-matter expertise to navigate the bespoke terms.
The leader’s authority on open-market business is typically as defined in the slip — SCAP thresholds, follower agreement requirements, claims market designation. The Scheme provides the framework; the slip provides the specifics.
For brokers, open-market business is the most labour-intensive but also the most strategic. Major broker franchises (Aon, Marsh, WTW, Howden, Lockton in the broker market) compete for open-market business that is unsuitable for binder or lineslip arrangements.
For insurers, open-market business is the underwriting prestige. The franchise of leading significant open-market placements supports the syndicate’s broader market position.
“Bespoke open-market” — large complex placements with negotiated terms.
“Standard open-market” — placements using LMA standard wordings with limited modification.
“Subscription open-market” — placements where multiple insurers each take small lines totalling 100%.
“Vertical open-market” — primary placement with separate excess layers placed open-market.
“Combined open-market and binder” — primary placed open-market with binder cover for smaller risks within the same insured’s portfolio.
A major airline’s hull and liability cover is placed open-market across the London Market with multi-layer participation. The primary $300m hull cover is placed across 22 syndicates and companies (Lloyd’s and ILU/company markets). The excess layers above are similarly subscribed.
A fuselage damage incident produces a $42m claim against the primary cover. The leader (a major Lloyd’s aviation syndicate with a 18% line on the primary slip) handles. Above SCAP; full market agreement sought and received.
Settlement at $39m at month 17 after extensive engineering investigation, aviation regulator interface, manufacturer warranty interaction and complex coverage analysis.
Bureau processes the settlement. Each participating insurer’s share is calculated by line and paid through the bureau accounting cycle:
Total $39m paid to the airline’s broker for remittance to the airline. The bureau handles the accounting across 22 participants smoothly.
The leader’s reinsurance programme recovers approximately $4.5m on the claim through its retrocession arrangements. Each following participant’s reinsurance accounting flows through its own retrocession programme.
By Matt Bartlett, Director, on 2026-06-11. Next review: 2026-12-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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