John Neal in an interview with the FT and speaking at his first public speaking engagement, revealed some of the feedback that he has received since starting as Lloyd’s CEO, set out Lloyd’s strengths and laid out his vision for an improved future and mentioned some of his plans for transforming the market.
As promised in his remarks when he accepted the role of CEO in October, John Neal has spent much of his time listening to the market’s stakeholders, gleaning opinions and feedback to identify what are the areas that most need addressing in order to ensure the future wellbeing of the market. As a result of his fact-finding the key areas being addressed are:
- improving the market’s performance,
- cutting the market’s costs,
- maintaining the digitisation of business placement,
- redirecting the focus of winning more business to more developed markets such as the USA and Europe,
- transforming the Corporation and “getting rid of unnecessary red tape and duplication”.
John said his vision is that “we must be the global marketplace for commercial corporate and specialty (re)insurance. And we must be the world’s most technologically advanced marketplace that delivers outstanding value and products for our customers.” He also said “we must have the business model, the technology, the talent, the products and the distribution channels in place to seize the opportunities everyone in our sector will be competing for.”
He was candid in his assessment that “Lloyd’s has not performed to the best of its potential over the past few years…Lloyd’s needs to rethink its approach.” He attributed this to insufficiently reacting to the changing market conditions and not beginning to address the performance challenges. Instead “Lloyd’s seemed to react in other ways, expanding into new territories, watching costs increase and growing, even though business was becoming less and less profitable.” In his speech, he said that this is unacceptable, not where Lloyd’s should be or wants to be: “Our long-term track record demonstrates the market’s ability to be agile and adapt to the prevailing winds – to know when it needs to tack and change course…but on this occasion it hasn’t done it fast or hard enough.”
John’s candour was matched with optimism: “There is enormous opportunity ahead for the Lloyd’s market – we just need to get into position to seize it.” As we know (and as reported in the Hampden Newsletter) Lloyd’s performance review work has had a measurable effect and is the first major step in addressing the under-performance by some syndicates that adversely affected the whole Lloyd’s result. In his words “We are working with the market to ensure its underwriting, and the way it assesses and price risk, is world-class”.
John Neal’s speech contained both confidence and optimism that the senior management team of Lloyd’s is determined to succeed in modernising the market, reducing its cost structure and improving its performance. According to the FT, John Neal is due to unveil details of his plan in a prospectus in March.
For the full speech please click here.