New Lloyd’s CEO John Neal has hired consultancy Deloitte to carry out a wide ranging investigation on the market’s recent decisions and how it plots its future

A comprehensive root and branch investigation into the future of Lloyd’s is underway with nothing about the world’s oldest insurance market is out of bounds.

New Lloyd’s CEO John Neal, who revealed today a massive 2018 loss at the historic institution, has hired consultancy Deloitte to carry out a wide ranging investigation on the market’s recent decisions and how it plots its future.

It comes amid reports of ‘horrific’ sexual harrassment at Lloyd’s and plans to correct the problems.

The firm is set to deliver its report in May and initial reports are that the results of over 300 interviews have cast doubts in the long term future of the market’s famous underwriting room.

It comes as Lloyd’s reported an underwriting loss of £1bn for 2018 on a combined ratio of 104.5%.

Deloitte’s remit is reported to have been to examine the benefits being delivered by the initiatives launched in recent years, which include the PPL electronic placement initiative, and Lloyd’s Vision 2025 strategy. It has also been asked to examine the potential benefits and success of the market’s newly defined strategy for the future.

The investigation is also said to be examining the viability of Lloyd’s current Asian and Middle East hubs, based in Singapore and Dubai. Growth at both has stalled and many in the market believe Lloyd’s is looking more to the potential for growth in the North American markets than pushing into developing and emerging economies.

Wide-ranging review

One market insider told Insurance Times: “Deloitte staff have been swarming over the market for some weeks. They have been interviewing hundreds of people involved in all aspects of not only Lloyd’s but also the wider London market.”

They have been examining the London market’s process reform efforts such as the new Target Operating Model (TOM) and PPL the electronic system for the placement of business at Lloyd’s, introduced by former CEO Inga Beale, who mandated a rising percentage of risks needed to be placed electronically in the coming years.

However, reports said that the interviews already been undertaken by Deloitte have found many brokers saying their time in face to face negotiations in the Lloyd’s underwriting room has dramatically reduced, leading to some in the market to believe that the end of the underwriting room may well be neigh.

A London market underwriter told Insurance Times: “Any investigation such as that being carried out by Deloitte will generate a great deal of discussion in the market. Much of the talk at present is around the fall in the number of visits to the underwriting room by brokers.

“The cost of having a box at Lloyd’s is not cheap and there are many who think that if Deloitte’s report highlights the drop in footfall it will open up the debate as to whether face to face underwriting has a future.”

Lloyd’s CEO John Neal said: “Over the last six months we have asked hundreds of stakeholders to tell us how we should evolve Lloyd’s to build a collective vision for the future. We have today released a preview of this vision in advance of a full prospectus to be published on 1 May that discusses the future of insurance at Lloyd’s.”