Unless Lloyd's controls it costs and demonstrates underwriting discipline it will no longer be a viable market, warned a leading reinsurer.

Speaking at an Insurance Institute of London lecture last week, XL Re chief executive Henry Keeling said the market had to withdraw from markets where it could no longer make a profit.

"In the past, the focus has been on not losing business rather than making a profit. But once a market moves away it is imperative that underwriters back off, even if it is at the expense of client relationships."

Keeling said that debate should no longer be about London versus Bermuda. "It is about how insurance centres inter-relate. The trend is for globalisation. The smart players will leverage both London and Bermuda for what each has to offer."