Introduction

The words of Lloyd's chairman Lord Levene, a man with a plan, who resolutely wants to change the face of the market. Brokers running around Leadenhall Market with arms full of paper: "Pathetic", he says.

Lord Levene has inherited the expansive plans set out by the previous incumbent, the late Sax Riley, and this year will be crucial for their implementation.

Why? Because in April 2004, Lloyd's will post record profits, detailing the full extent of the hard market during 2002 and 2003. It will be testament to the work of Lloyd's executive board, in particular chief executive Nick Prettejohn and ex-finance director Andrew Moss, and the franchise performance board forcing the market to improve its underwriting discipline to attain bottom line profitability.

Prettejohn has become the champion of the Lloyd's market reforms and in this year's supplement explains his vision for the coming years (page 9). He is aware that the cycle may turn quickly, which could lead to criticisms from the franchisees. But driving down the burgeoning £500m in claims costs the market incurs, through the claims strategy review and the far-reaching Kinnect project, will make Lloyd's an attractive proposition to foreign investors.

So can new investors be tempted by a 314-year-old institution, perceived to be stuck in its ways? Chief executive of investment bank Noble Group, Ben Thompson, believes that investors are nervous because they are worried the heights of the hard market will inevitably slump to the depths of a severe soft cycle with its suffocating losses (page 11).

This has left many capital providers sitting on the fence waiting to see if the market reforms can succeed in controlling the premium cycle.

Lord Levene is adamant that the days when underwriters shrugged their bare shoulders after losing their shirts, comfortable in the herd mentality that everyone was in the same boat, are definitely over.