John Neal, Chief Executive Officer (CEO) of Lloyd’s of London, has said that the marketplace will continue to focus on driving efficiency in 2019, as well as on winning new business in the U.S and Europe.
Speaking in an interview with the Financial Times, Neal said that he is due to release a detailed prospectus in March outlining his plans for rejuvenating the Lloyd’s market.
The CEO, who took over from Inga Beale in October 2018, has spent his first few months at Lloyd’s dealing with poorly performing syndicates following five years of falling profits that culminated in a £2 billion loss in 2017.
These efforts will continue throughout 2019, Neal explained, with renewed focus on leveraging technology to reduce costs and streamline business.
“We know that we need to be the most technologically advanced and cost-effective platform on which people can operate,” he told the Financial Times.
Neal hopes the further use of technology can reduce the cost of doing business at Lloyd’s by a quarter, helping to keep prices down for customers and address concerns from some of the larger insurers at Lloyd’s.
“The reality is you can’t have a client spending £100 on a policy and have £40 of that being absorbed in cost,” Neal said. “I think we’ve just got to make the day job easier for the underwriter and broker to make it more efficient … [Administration] has got to be simplified.”
Lloyd’s will also be rethinking its approach to international operations and focusing more on winning business in the U.S and Europe, following the establishment of its post-Brexit hub in Brussels last year.
This approach could be seen as a response to pressure from figures like Andrew Brooks, incoming Chair of the Lloyd’s Market Association (LMA), who recently urged Lloyd’s to refocus its growth strategy away from emerging markets and towards the U.S.
Neal told the Financial Times that, while Lloyd’s network of licences in emerging markets are still important, its days of office-building around the world are over.
“If you’re in insurance or investment banking or banking, one dollar and two dollars of everything you do is still US derived, so it’s very important that you maintain your connection and your relevance with the US market,” he said.
“At the same time, in a post-Brexit world we’ve really got to be very focused on ensuring that our connections in Europe are strong.”
Addressing suggestions that Lloyd’s should focus on niche, specialist areas rather than bigger, commoditised policies, Neal added: “That would be utterly pointless.”
“I think quite the reverse. We need to be a global marketplace . . . every major insurance and reinsurance group in the world and every trading partner should want to participate.”