The latest attempt to reform Lloyd's may stumble in the same way as its predecessors, but Sarah Goddard says the Bain recommendations do give hope
Reports espousing reform at Lloyd's are hardly a new concept. Indeed, the second half of the last century presented a stream of reports, starting with the Cromer report in the late 1960s and now currently at the much talked about, but little seen, recommendations by Bain & Co.
Over the years, many reforms have been proposed, all with the ultimate aim of increasing Lloyd's capacity. And from the little information that has been issued by Lloyd's on the recommendations of the chairman's strategy group, aided by management consultancy Bain & Co - coincidentally Lloyd's chief executive Nick Prettejohn's alma mater - there doesn't seem to be much in it that hasn't been proposed, or at least mooted, in the past.
Of course, Bain is still just a series of recommendations. Implementing them is not a given. In fact, from what's currently been issued, it will take Parliamentary time to implement some of the changes.
The Lloyd's Act 1982, issued in the wake of the Fisher Report, embodies in legislation issues such as the governance of the market, three-year accounting and the concept of unlimited liability.
When the Task Force report in 1992 recommended the introduction of corporate investors, it took time to find a way around the unlimited liability nature of the business. Indeed, all corporate investors still are bound by it.
It's just that unlike Names, the corporates are limited liability companies.
Moving away from the annual joint venture may prove a little more sticky, and may well necessitate a change to the Act. In past years, Parliamentary time has been on the thin side when it comes to Lloyd's, and it will be interesting to see if the current government will champion the cause of modernisation.
Several of Bain's recommendations have seen the light of day in previous attempts to reform the market.
When Reconstruction & Renewal was implemented in 1996, many saw it as a move towards changing Lloyd's into a market of insurance companies, an insurance `bourse' perhaps.
With Bain & Co suggesting the end of Names with unlimited liability, the move to continuity across years rather than the annual joint venture, and one-year accounting, it looks like that the Lloyd's bourse is now a step nearer.?
