Once the prospective Member has set up their limited liability vehicle, they must decide whether they wish to underwrite in a MAPA fund or as a bespoke Member.

Both MAPA and bespoke Members have to purchase their syndicate capacity at the annual Lloyd’s capacity Auctions, which are held each September. If a new Member elects to join the new HAL MAPA then all of the auction decisions are undertaken by the MAPA manager.

The cost of acquiring capacity though the Auction process is the major up-front cost associated with new membership of Lloyd’s. Members should be aware that the cost of acquiring capacity through the auction process has varied from year to year, but in recent years there has been an increase in the overall price. In 2009, the average price of capacity at Auctions 1 to 3 was 27.8p per pound. This meant that the cost of acquiring £1 million of capacity was £278,000. However, the HAL new Members’ MAPA managed to acquire its portfolio for 21.1p per pound. HAL believes that the best way for new members to enter the Lloyds market is by means of joining the HAL new members MAPA

HAL requires all new Members to pre-fund the purchase of capacity prior to the auctions.