Nine months on … and not one taker. But it’s still early days, says chief executive
No regional brokers have entered the Lloyd’s market nine months after amendments to the law would have allowed them to do so.
In an exclusive interview with Insurance Times, Lloyd’s chairman Lord Levene and chief executive Richard Ward reveal that while there have been some discussions with regional brokers over entering the market, none has signed up.
Ward said: “At the moment, I would suggest the existing Lloyd’s broking community, of 175-plus [accredited] Lloyd’s brokers, including the three largest brokers, is serving the market well. We don’t know what is going to happen in five to ten years’ time.”
Levene commented: “If you’d listened to some of Lloyd’s brokers when we introduced this change, you would have thought it was the end of civilisation as we know it; that they were all going to be wiped out. In fact, the difference is marginal – it’s a long-term move.”
Asked what had been the value of introducing the legislation, Levene said: “It’s not pointless – we don’t know who is going to take it up. The market will change, so why leave an obstacle there when you don’t need it?”
The market was opened up to non-Lloyd’s accredited brokers under the Regulatory Reform Order to the Lloyd’s Act, which was passed in November last year. The order also allowed Levene to serve a third term as chairman and made further changes to how the market is governed and regulated.
Biba chief executive Eric Galbraith said most regional brokers who wished to place business in Lloyd’s already did so through wholesale Lloyd’s brokers. “It’s very early days – Lloyd’s would be looking at another sector of the market, one which doesn’t currently place business in there, or at breaking down existing [wholesaling relationships], which adds another layer of complication,” he said.
Levene and Ward also revealed the scope of the strategic review of Lloyd’s currently being conducted by Deloitte, and said the insurance industry was performing well in the face of the economic downturn.
Levene said: “There’s a general recognition in this country now, which has been growing for some time, that the insurance industry has come out of the financial meltdown pretty well. People are finally starting to recognise that if you set aside AIG, whose problems didn’t come from its fundamental insurance business, in general, and in Lloyd’s in particular, we are in good shape. On that basis, we must be doing something right – and if it ain’t broke, don’t fix it.”