  This research presents a novel Discrete Event Simulation (DES) of the Lloyd's
of London specialty insurance market, exploring complex market dynamics that
have not been previously studied quantitatively. The proof-of-concept model
allows for the simulation of various scenarios that capture important market
phenomena such as the underwriting cycle, the impact of risk syndication, and
the importance of appropriate exposure management. Despite minimal calibration,
our model has shown that it is a valuable tool for understanding and analysing
the Lloyd's of London specialty insurance market, particularly in terms of
identifying areas for further investigation for regulators and participants of
the market alike. The results generate the expected behaviours that, syndicates
(insurers) are less likely to go insolvent if they adopt sophisticated exposure
management practices, catastrophe events lead to more defined patterns of
cyclicality and cause syndicates to substantially increase their premiums
offered. Lastly, syndication enhances the accuracy of actuarial price estimates
and narrows the divergence among syndicates. Overall, this research offers a
new perspective on the Lloyd's of London market and demonstrates the potential
of individual-based modelling (IBM) for understanding complex financial
systems.
