But insurer will not decamp to Gibraltar
Lloyd's must scrap charges next year to remain attractive to future business, said insurer St Paul's.
UK managing director of St Paul's International and St Paul at Lloyd's, Martin Hudson, said: "It is imperative the additional charges come to an end quickly. Lloyd's has always been a market that has given a cost advantage. Without this, it is a marketplace fighting with both hands behind its back.
"We are absolute advocates for the charges to end in 2004," he said.
Objections to Lloyd's additional charges have led Admiral and Zenith to move business to Gibraltar while Cox Retail is threatening to leave the market. But Hudson said he will remain loyal to Lloyd's.
"That will not happen here - we are not disappearing to Gibraltar," he said.
St Paul at Lloyd's would restructure, focusing on six business units, writing most of its commercial business under Syndicate 5000.
"We have one managing agency and one major syndicate, 5000, which are 100% capitalised by St Paul. The vast bulk of our capacity, £445m for 2003, is in Syndicate 5000."
The six business units are: aviation; marine; specialist property; personal lines (non-motor); property and casualty (P&C); and financial and professional business.
Hudson is already singing from the same hymn sheet as Lloyd's franchise performance director Rolf Tolle, highlighting the need for bottom line profitability.
"Managing the bottom line is the issue because premium results from the underwriting decisions you make day by day. Your premium will come from proper underwriting and pricing techniques. I'm not that worried about top line profits."
St Paul at Lloyd's now writes only "short-tail business". Hudson said St Paul at Lloyd's was "alert to more disruption in the market in the future", particularly with solvency adequacy issues affecting many global companies.
Hudson also said two specific areas of change at the Lloyd's operation would be ceded reinsurance as "we are buying a lot more external reinsurance than an organisation our size really needs".
From 1 January 2004, he said, St Paul at Lloyd's "will have a different view on risk appetite" and would deal with less reinsurance brokers.
He also wanted to translate the good "distribution discipline" exercised by St Paul International in the UK to St Paul at Lloyd's to offer a "holistic face to the brokers".
"There is crossover between both entities and the brokers they talk to.
"We want to try to put a unified front to the big brokers and the regional brokers we deal with."