Richard Ward has talked the talk in his first year as Lloyd's chief executive, but can he walk the walk as conditions get tough? Emma Jones reports
What a difference a year makes. Or does it? As Richard Ward marks
12 months in charge of Lloyd's later this month that will be the question on everyone's lips.
Much was made of the man who was credited with leading the International Petroleum Exchange (IPE) from a traditional outcry market to one of full electronic trading while acting as chief executive from 1999 until October 2005.
Ward's success at the IPE made him the ideal candidate to take over the chief executive's role at a time when the Lloyd's market was desperately seeking a suitable electronic trading solution following the closure of Kinnect.
As he enters his second year as successor to Nick Prettejohn, who left Lloyd's at the end of 2005, the analysis will begin on whether Ward, who promised so much, has actually delivered tangible solutions or simply talked a good game of insurance.
One senior industry figure says: "His nickname in the corporation [Blair] sums him up because he says all the right things. He is very, very eloquent.
"But, despite not delivering anything tangible, in the process of getting around the market and essentially finding out what the customer and the market thinks, wants and needs, he has done well.
"What he has also done is to clearly establish himself as a very visible chief executive, both visible and accessible, which is in contrast to Nick Prettejohn who was both invisible and inaccessible."
When Ward delivered his maiden speech six months into his tenure, he promised to continue the progress of those who led Lloyd's before him.
His aim was to ensure that the market was not just "fit for purpose" but also "fighting fit".
Ward confidently told the UK insurance community: "My immediate focus is on fixing the fundamentals at Lloyd's. My first priority is to deliver efficient business processes such as placement, claims and accounting and settlement that will enable us to grow.
"If I could sum up my aim in one sentence, it would be to ensure that Lloyd's is the marketplace of choice. If businesses choose to use another platform it should be because of the advantages of that platform, not the disadvantages of Lloyd's."
One month later he reiterated the same, if not identical, message to delegates at the Xchanging conference.
Improvements have undoubtedly been made in the area of business process reform and bumper results in 2006 have certainly added a healthy glow to his first year resumé.
But the question remains: is progress a result of external efforts or due to Ward's clear management and guidance.
"I am not sure he can point to any success here, just industry success," explains a market source.
After all, more than 80% of contracts were already achieving certainty when he took charge, and an electronic claims and accounting and settlement repository were also in development.
With the added work of the franchise performance directorate, introduced in 2003 to create a disciplined marketplace "of well-managed businesses with a focused and rigorous approach to underwriting", could he really fail?
As Ward himself conceded: "There aren't many organisations that can boast a global brand, unrivalled heritage and a unique concentration of talent."
So, as his first year passes, what will the market expect of Ward as he carries the torch of Lloyd's forward?
"This year he will have to start to show some tangible work, because there are some people who are still questioning the expense level of the Lloyd's platform," the senior industry figure adds.
"While this year's results mask the expense, he does need to bring down the cost base of operating at Lloyd's and he needs to do that by driving back end process reform."
Calls for further work on the expense level at Lloyd's have also come with a warning about controlling the amount of incoming capital in a softening market.
"It is great for him to go around the market announcing £16.1bn of record capital, but it is not necessarily what the market needs in a soft cycle," insists one Lloyd's underwriter.
"While we had a record year, and something of a benign year, his test will come if the market has a poor year in terms of natural catastrophes, which will affect the bottom line. He will have to be careful of that while at the same time expanding the capacity."
Given the timescale of projects such as Lloyd's three-year plan and the slow turning wheel of the 319-year-old market, is it fair to judge a man on 12 months' work?
As Ward himself puts it: "We cannot expect to solve all of the challenges that we face instantly. It's like the old saying about the best way to eat an elephant – with a teaspoon. Much easier than trying to eat it in one go."
As the honeymoon period comes to an end and his second term begins, the jury it seems remains out.
"He took over a ship in full sail and in fair weather and has had a glorious 12 months of being the mouthpiece of the market announcing fantastic results and also the Equitas deal," insists a Lloyd's source.
"But, the jury has still got to be out, because he has yet to be tested and we need to see what he is like under incoming fire." IT