Lloyd's is set to double its charges for new entrants to the insurance market to address criticism that existing rates undervalue the franchise benefits it offers members.
The higher administrative charges are planned to take effect from the 2001 year of account. They will apply to new managing agents, syndicates and corporate members for their first three years at Lloyd's.
A Lloyd's spokesman said the move answered concerns that existing charges did not reflect the true value of the 300-year-old market's brand, international trading licences in 64 territories and high security ratings such as AM Best (A excellent).
The increased charges will not affect non-Lloyd's brokers who will be able to apply to trade in the market from next year.
The plan is contained in Lloyd's Market Board's second three-year strategy document, Priorities for Growth 2000-3, dubbed a manifesto by Lloyd's chairman Max Taylor.
Taylor said: "Electronic commerce is redrawing trading patterns, customers have more choice than ever, consolidation is re-shaping our marketplace. These are the changes we have to keep up with, or ideally get two steps ahead of."
A key change being pursued by the board is to abolish the legal ban on ownership links between managing agents and Lloyd's brokers, contained in the 1982 Lloyd's Act. This is seen as increasingly irrelevant, as is the need for all business to be transacted through an intermediary.
Another proposal is to downsize administrative costs by as much as 20% over the next two years.
The market board plans to cut the number of staff employed by Lloyd's corporation to just 500 by 2001, compared to almost 2,000 in 1998.
Lloyd's policy signing and claims offices are likely to be turned into commercial companies selling their services to the market's 68 managing agents.
Steps have been taken to speed up premium and claim payments by introducing direct settlement between insurers and clients.
The market board is going for growth in the world insurance market and has sought new trading licences in South America, China, Central America and Eastern Europe.
- Priorities for Growth 2000-3 can be read on Insurance Times' web site at www.instimes.co.uk/frameset2.htm
