Franchise performance director in pledge to syndicates

Lloyd's franchise performance director Rolf Tolle admitted this week that one of the key challenges for the franchise board was to "earn the trust" of Lloyd's syndicates.

In a speech to syndicates outlining the franchise board's plans for 2004/05, Tolle conceded that the franchise performance directorate (FPD) needed to alter its approach to governing Lloyd's.

"We [the FPD] need to change our attitude as franchisor. We have to be the business partner you expect," Tolle told the syndicates. He added that the FPD had to ensure that it won the confidence of the syndicates.

"The FPD must earn your trust. We have to work with you in an active and constructive way.

"You are probably thinking he says he's not the regulator, but when will he turn back into the regulator." But Tolle said the FPD had "no intention to micromanage".

He also warned that some syndicates would have their capacities reduced in 2005.

"With regard to cycle-management, the big tool you have is to reduce capacity. We have to review the capacity levels we bring to the table in 2005."

Tolle added that some syndicates would have to go into run-off as the franchise starts being managed in a "more professional way".

Tolle also outlined a plan of action for the FPD in 2004/05, which included:

  • Action plans for all syndicates
  • "Themed reviews" of approaches to reserving (the first of which will cover financial institutions business)
  • More in-depth analysis of market data
  • Improvements in the monitoring of rate/exposure change (the FPD will reveal best practice guidelines in April)
  • Further review of realistic disaster scenarios (RDS) – new scenarios will be revealed on 1 April
  • Amendment of the business plan template.
  • Tolle added that the FPD was also working on the first franchise business plan, which would be finalised later this year.