Last week's revelations that plans to modernise Lloyd's could begin as early as 2003 may well signal the end of 314 years of tradition and heritage.

If recommendations made by consultants Bain & Co are implemented, the insurance market will see the end of Names with unlimited liability, the annual venture and three-year accounting.

Yet change is what Lloyd's needs to help prevent itself from becoming a sinking ship. And that change must come quickly.

Lloyd's has repeatedly been attacked for its sloth - for its lengthy premium and claims payment processes, for relying on brokers carrying around endless reams of paper and for its reluctance to embrace modern technology.

It is now attempting to address those issues and next month we will finally see the introduction of the London Market Principles, which aim to modernise back-office processes in Lloyd's and the Company Market.

But every day Lloyd's faces increasing pressure to prove it can be the hub of the insurance industry and is up to speed with its competitors.

Last week, two new Bermudan companies started up and there is already evidence that overseas competition is stealing business away from Lloyd's

And there are fears new rivals will emerge later this year and steal the limelight away from Lloyd's.

No one doubts the challenges ahead. Transforming such a massive institution gagged with stubborn practices will take time.

But as Tony Markel, president and chief operating officer of Markel Corporation, strongly stated at the Insurance Institute of London earlier this month, change must come as soon as possible.

Now that the momentum has started, Lloyd's must keep the ball rolling. If it doesn't, it may have to revert back to the old-time traditional practice of ringing the Lutine Bell.