New York: Modernising Lloyd’s of London will be a challenge, its chairman Bruce Carnegie-Brown said in New York late on Tuesday, as the 330-year old insurance market prepares to switch business to two automated exchanges.
The specialist Lloyd’s market insures everything from hurricane damage to soccer stars’ legs, but has been buffeted by two years of steep losses due to high levels of insured losses from natural catastrophes.
Its traditional way of doing business face-to-face in its City tower is expensive, as is its reliance on brokers and other middle men to offer its insurance across the globe.
It also faces increasing competition from other markets such as Singapore and Dubai.
Lloyd’s outlined plans last month to set up electronic platforms from as soon as next year.
But its intricate structure involving 99 underwriting syndicate members and hundreds of brokers makes change difficult.
“I do not underestimate the difficulty of this challenge because frankly, history is against us,” Carnegie-Brown told an industry dinner, adding that scepticism was “to be expected”.
“Lloyd’s has embarked on modernisation before and largely failed to deliver it. We’ve spent money, deployed new technology and hired talent for projects over many years but we have not done so well in bringing the market... behind our promise.” But Carnegie-Brown said recent developments at Lloyd’s such as setting up a Brussels subsidiary to cope with Brexit and moving some business to a smaller electronic platform gave him confidence.
He also pointed to the market’s success last year in cutting back on loss-making business through stricter controls on its syndicates.
Carnegie-Brown said Lloyd’s, which acts as a regulator as well as a marketplace, would continue close oversight of poorer-performing syndicates, while giving a lighter touch to the stronger performers.
The United States and Canada is Lloyd’s’ biggest market, accounting for 51% of its business last year.