How do Lloyd's syndicates handle FX on US dollar premiums and claims?
Much of it happens inside Lloyd's central accounting and settlement. Lloyd's says its Currency Conversion Service translates premiums and claims between currencies at the point of settlement, according to each managing agent's standing instructions.
Premiums and claims between Lloyd's brokers and syndicates are processed and settled centrally. Where an amount is in a currency the managing agent has instructed Lloyd's to convert, the conversion is applied at settlement on those standing instructions. So the conversion does not have to be booked as a separate trade for each premium or claim that passes through.
That makes the standing instructions the place where the currency decisions sit. They are worth reviewing alongside the syndicate's expected claims by currency, so that dollars needed for dollar claims are not converted at settlement only to be bought back later. Check which currencies central settlement uses, and how your instructions treat each one, with Lloyd's directly.
What is the Lloyd's FX service and what does it cost?
Alongside the Currency Conversion Service, Lloyd's offers managing agents a bespoke FX service. For both, Lloyd's says it adjusts rates to recover up to 5 basis points. That is a low cost.
- Currency Conversion Service
- Within Central Accounting and Settlement. Translates premiums and claims between currencies at the point of settlement, according to agents' standing instructions.
- Bespoke FX service
- For managing agents, who contact Lloyd's to discuss and agree their foreign exchange requirements. A managing agent must first sign a legal agreement with Lloyd's setting out the terms of the service.
- Settlement timing
- Lloyd's normally trades spot, at T+2, meaning settlement two business days after the trade. For US dollars, Canadian dollars and euros it can provide a same day service if contacted before 12.00.
- Cost
- For both services Lloyd's adjusts rates to recover up to 5 basis points.
- Source
- The Lloyd's foreign exchange page on lloyds.com, read 2 November 2026.
To put 5 basis points in context: on a conversion of US$10,000,000, 5 basis points is US$10,000,000 x 5 / 10,000 = US$5,000. That is a low figure for a conversion of that size, and we do not claim that any outside provider beats it.
How do the Lloyd's currency services compare with an outside provider?
They do different jobs. The Lloyd's services are built around syndicate settlement. An outside provider handles conversions and payments on a firm's own accounts, including flows that never touch central settlement.
| Point | Lloyd's Currency Conversion Service | Lloyd's bespoke FX service | An outside regulated provider |
|---|---|---|---|
| What it is for | Converting premiums and claims at the point of settlement within Central Accounting and Settlement | Foreign exchange requirements a managing agent agrees with Lloyd's | Conversions and payments on the firm's own accounts, including flows outside central settlement |
| Who uses it | Applied according to managing agents' standing instructions | Managing agents that have signed a legal agreement with Lloyd's | Any firm the provider accepts after its own checks, with the account in the firm's name |
| How it is instructed | Standing instructions | By contacting Lloyd's to agree the requirement | Online platform, payment file or dealer, depending on the provider |
| Settlement timing | At the point of settlement | Normally spot at T+2. Same day for USD, CAD and EUR if requested before 12.00 | Depends on the provider, the currency and its cut-offs. Ask for them in writing |
| Published cost | Rates adjusted to recover up to 5 basis points | Rates adjusted to recover up to 5 basis points | Varies by provider, currency and size. Measure the markup to mid on real quotes |
| Where money sits | Within Lloyd's settlement | Within the arrangement agreed with Lloyd's | At the provider: a deposit at a bank, or safeguarded at a payment or e-money institution, which is not FSCS deposit protection |
| Best suited to | Premiums and claims that already settle through Lloyd's | Requirements a managing agent wants to agree with Lloyd's directly | Flows that do not go through Lloyd's, and a second payment route |
The Lloyd's columns summarise the lloyds.com foreign exchange page as read on 2 November 2026. Check the current terms with Lloyd's. InsuranceFX is not affiliated with Lloyd's and nothing on this page is approved or endorsed by Lloyd's.
Which flows sit outside Lloyd's central settlement?
The managing agency's own costs, service company and overseas office spending, claims funds sent directly to third-party administrators or coverholders abroad, and any other payment that does not run through Lloyd's settlement. These are where an outside provider can help.
| Flow | Typical currency need | Question to ask |
|---|---|---|
| Managing agency salaries, rent and suppliers | Sterling costs funded partly from fees and profit commission that may be earned in other currencies | Who converts the agency's foreign currency income, and at what markup? |
| Service companies | Operating costs and local payments in the currency of the territory | Which bank or provider converts and pays, and has anyone checked the rate? |
| Overseas offices | Local payroll, rent and tax in local currency | Are local costs funded by many small conversions or one planned conversion each month? |
| Claims funds to TPAs and coverholders | Loss funds in the currency claims are paid in, where these are sent directly rather than through central settlement | Who converts the funding, the syndicate or the administrator, and at whose rate? |
| Expert, legal and adjusting fees abroad | Invoices in the expert's local currency | Are invoices paid in their currency, or in sterling for their bank to convert? |
| Other payments outside settlement | Depends on the payee | Is there a second route if the usual bank or provider is unavailable? |
Lloyd's describes both of its currency services in terms of syndicate settlement. If you are unsure whether a particular flow can use the bespoke service, ask Lloyd's before assuming it can or cannot. Flows outside settlement are easy to overlook because they are spread across entities and offices and often nobody owns the rate. They are the flows a cost review looks at first. For overseas claims paid outside settlement, our page on paying insurance claims overseas covers charges, local payments and verification.
Should a managing agent use the Lloyd's FX service or its own FX provider?
For flows inside central settlement, the Lloyd's service is often the sensible choice. For flows outside it, compare an outside provider on real quotes for those flows.
Up to 5 basis points, with the conversion built into settlement and no separate account to run, is hard to improve on for the flows it covers. Moving those flows to an outside provider would add payment steps, cut-off risk and another set of controls, and any difference in rate would need to outweigh all of that.
The case for an outside provider rests elsewhere. It rests on flows that never touch central settlement and are converted today at whatever rate the agency's bank applies, and on having a second payment route if a bank or provider has an outage or fails. Argentex LLP, a non-bank FX provider, entered special administration on 21 July 2025, which is a reminder to know where money sits at each provider and to keep a second route open.
How do we compare an outside provider fairly with the Lloyd's rate?
Compare the same trade at the same time: the same currency pair, amount and value date, measured as markup to mid, with every fee and the work around it included.
markup (bps) = |your rate − mid| ÷ mid × 10,000
- Use one benchmark. Measure the Lloyd's conversion and the outside quote against the same market mid at the same moment, not against each other's rate on different days.
- Compare like sizes. A quote for one large trade says little about a run of small payments, and the reverse.
- Add every fee: payment fees, receiving fees, intermediary deductions on SWIFT payments and any account charges.
- Count the work: onboarding, user set-up, approvals, reconciliation and statements in a format your systems can load.
- Check timing: cut-offs, same day settlement in the currencies you need and holiday calendars.
- Check where money sits. Money held by a payment or e-money institution is safeguarded, not covered by FSCS deposit protection. The FCA's new safeguarding rules for those firms, in CASS 15, took effect on 7 May 2026.
- Check the provider's authorisation on the FCA Register before anything else.
If an outside quote for a flow inside central settlement is not better than the Lloyd's figure once everything is counted, the sensible answer is to leave that flow where it is. Our comparison will show that plainly.
What should we ask our finance director about FX?
Start with two questions: which of our flows go through central settlement and which do not, and what does each one cost today in basis points?
- What do our standing instructions convert at settlement, and do they still fit the currencies our claims are paid in?
- Do we use the Lloyd's bespoke FX service, for which flows, and have we checked those rates against mid?
- Which flows run through the agency's own bank, at what markup, and when was that last checked?
- Who converts and pays for service companies and overseas offices, and who approves those payments?
- Are claims funds for third-party administrators converted by us or by the administrator?
- Do we have a second payment route if our bank or provider has an outage or fails?
- How is the rate on each conversion evidenced for the audit file?
- Who owns the annual review of what we pay?
What does InsuranceFX do for managing agents?
We review the flows outside central settlement against mid and put them to regulated providers without naming your firm. We offer nothing that replaces Lloyd's central settlement and we do not claim to beat the Lloyd's rate.
A cost review of the agency's own conversions and its service company and overseas office flows shows the markup paid today, by currency and size. A blind quote shows what providers on our panel would charge for the same flows. Any account is opened by your firm directly with an FCA-authorised provider, which carries out its own checks, conversions and payments. InsuranceFX never holds money or makes payments.
InsuranceFX is not affiliated with, approved by or endorsed by Lloyd's. We use the Lloyd's name only to describe its published services. For reinsurance flows between syndicates and cedants, see FX for reinsurance settlements. For Lloyd's brokers, see FX for insurance and reinsurance brokers.
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Sources
- Lloyd's, Foreign exchange, read 2 November 2026.
- Financial Conduct Authority, Argentex LLP enters special administration, checked 2 November 2026.
- Financial Conduct Authority, PS25/12: Changes to the safeguarding regime for payments and e-money firms, published 7 August 2025, rules in force 7 May 2026, checked 2 November 2026.