Eighteen months ago two McKinsey management consultants wangled a meeting with Sir Brian Pitman - the man who created Lloyds TSB and made the phrase shareholder value a burden to chief executives throughout the world.

The consultants plopped a two-inch thick business proposition on Sir Brian's desk and asked for his opinion. Sir Brian was wary. Although Lloyds TSB had a substantial personal lines presence, particularly in distribution, other areas of finance appealed more.

"I had been approached about getting into reinsurance, which I eschewed. I didn't like the idea at all, partly because I didn't really understand the business, but also it seemed to me it was such a cyclical business. It's easy to put new capital in, entry barriers are very low, and therefore I didn't want to touch it.

"But I made a big study of the market at the time. So when I read the business plan, I was quite clear that they had assessed the industry accurately," says Sir Brian.

David McDonald and Theo Duchen had a proposition called Acturis. In essence it was a trading platform for commercial insurance, allowing brokers and insurers to communicate in a paperless way.

Sir Brian enthuses: "I could see that if they could develop the right system and the right processes it would be a great success. They knew the industry well, having been consultants to brokers, and knew about the processes.

"As I got into it more and more, discussing this business plan with them, they then asked me - this sort of back and forth thing - whether I'd be willing to be chairman of this company," adds Sir Brian.

So far Sir Brian is happy with the progress, despite industry criticisms that Acturis is not yet live. Sir Brian explains: "What David and Theo have managed to do with some of the leading brokers is to actually work with them to make sure that this is going to work. Not to develop some fancy system that nobody actually wants because it's too complicated."

Impressive brokers
So what does Sir Brian make of the broking world now that he has had 18 months exposure? "I think brokers are impressive, wholly motivated. You see they are willing to really put themselves out for the customers. They go the extra mile with their customers. This is why they've been successful, `You want me to see you at 9 o'clock tonight? Why not? You want me to come to such and such factory to meet you or such and such a place? Of course we'll do it' is their attitude."

He adds: "Their smallness actually is the secret of their success, because they are not seen as a great big corporation. But the disadvantage with being small in these days is you cannot invest . . ." He almost says "in Acturis" but holds back, sensing a blatant plug would not become a Square Mile dignitary.

While Sir Brian is playing a role within support services of general insurance, he has also played - albeit unwittingly - a key role in one of general insurance's biggest dramas of the year. Dennis Holt, the man ringing the changes at AXA, was an acolyte of Sir Brian's at Lloyds TSB and Holt is bringing the team he developed in Sir Brian's empire with him.

Easy ride
Not surprisingly Sir Brian rates Holt highly: "Dennis is an excellent man."

He adds: "You find they go fishing in the pond of the best companies to find the best people.

"The people at the very top of AXA are very switched on people and they're hiring people like Dennis because they think he can accelerate the process of change in their industry. I think they've got a good chance."

So what is Holt's best managerial attribute? "I think he's always exceptionally demanding of himself, sets himself very demanding goals, very stretching goals." So watch out at AXA if you are looking for an easy ride.

Hardening market
Sir Brian is quick to return to his shareholder value mantra. To deliver this, he says, old insurance pros are not what is needed: "AXA is being pressed on shareholder value, no doubt about that, but if you look at the people who now are running practically every big insurance company I know, a lot of them are not insurance people, they are much younger, they're much more active, they can look forward to quite a few years".

At the heart of AXA's solution is IT, says Sir Brian. He's a big fan of Churchill for that very reason. "Churchill's systems have sharpened the focus of the business. It's a great model," he says.

Battleground
Sir Brian cites Churchill as part of the model for general insurance going forward where lowest price is a given and service is the real battleground. "If you can't compete on price you're not going to get anywhere. The real question is whether you can compete on service, that's going to be the real key to all this. Let's face it, many insurance elements are totally commoditised," he says.

While Sir Brian says service is the battleground for personal lines, he thinks commercial lines vendors are in danger of hardening the market too quickly. "I think that margins will have to harden, otherwise you won't attract anybody into the business. But there's a limit to which those margins will harden, because of course if you suddenly jack up prices enormously against those who buy this cover, then they'll find other ways or there'll be much more self-insurance. They'll find other ways of laying off the risk," he says

Exciting place
But what happens to smaller companies who can't self-insure? "I think in that case, the prices get too high and drown them out of business," he warns.

So how much does it cost to grab a Square Mile hero for your board? Sir Brian is understandably coy: "I'm not there for the cash I receive. It is an exciting place to be. If in fact this is successful, they will make money, because a lot of them have got options in the company. But what is exciting for the people is that I think they feel they're really changing things. It's entirely motivating, if you think what you're going to produce is something which will really be useful, will really change things."

OK, if you want a Sir Brian on the board, you've got to have excitement. But do you just get a figurehead? "Oh no no, it's more than that. It's more than that for me. I would say that I see the Acturis people or at least we talk on the phone every week without a shadow of a doubt. And there's a half-day board meeting every month."