Insurance Day Summit London 2010

CLICK HERE to view interviews with Richard Ward, Chief Executive, Lloyd’s, Mark Byrne, Founder Flagstone Re, and Tom Bolt, Director, Performance Management, Lloyd’s at the 2010 Insurance Day Summit London

This year’s Insurance Day Summit London saw more than 50 chief executives come together to discuss the important challenges facing the sector in front of a live audience.

The competitiveness of London, and Lloyd’s specifically, was high on the agenda as delegates digested the impact of a change of government in the UK and forthcoming regulatory changes such as Solvency II.

The event gave market heavyweights an opportunity to voice what they think needs to happen for Lloyd’s to thrive in the coming years.

Lloyd’s chief executive, Richard Ward, kicked off by warning 2010 is likely to be the most challenging year at One Lime Street since he took the role in 2006.

Ward said he did not want to hear about growth, but was more interested in contraction and discipline.

“Don’t talk to me about growing, talk to me about how you are going to shrink and make underwriting profit,” he urged underwriters. “We need to make money from underwriting profit but this has been dropping off since 2005,” he continued. “It doesn’t look too good moving forward. So what do we need to do? We need to stop writing rubbish business. Cut it out. Focus on good business where we can generate profit.”

Robert Hiscox stepped up to the stage to tell delegates carriers should be charged a much higher entrance fee for a seat at Lloyd’s.

“I hear a lot of people say how great it is Lloyd’s is popular, that companies want to come here. We have a franchise that is priceless, one that has survived times of agony, in particular the R&R [reconstruction and renewal] years, but now we allow new entrants to come in and compete with us,” he said.

“I’ve said all along it should be $5m a seat at Lloyd’s. Some are being quoted £25,000 [$35,921],” he added. “I’m not against new carriers if they bring something good in, but they should pay for the privilege.”

Hiscox also voiced concern about regulation in Lloyd’s representative offices around the world.

“It is absolutely necessary to keep the licences, they are one of Lloyd’s major selling points, and I’m not against having representative offices around the world trying to encourage business back here. What I am concerned about is when I hear people can write business from the likes of Dubai [into Lloyd’s]. I want to see the person who has lost me money on the underwriting floor of Lloyd’s,” he said.

Cooper Gay chief executive, Toby Esser, said Lloyd’s efforts to establish international platforms in locations such as Brazil, China and Singapore had dumbed down the market’s brand as a centre of excellence.

“It is one thing for an insurance company to be expanding outside of Lloyd’s. For example, AIG, Ace, Liberty and QBE have all been in Lloyd’s. They have operations all around the world and there is no reason why companies should not do that.

“But to do it as Lloyd’s, outside the Lloyd’s environment, I think is highly questionable. I think it dumbs down the brand that is Lloyd’s and that centre of excellence that is about the excess, the difficult and the surplus lines types of business,” he continued. “People knew if they wanted to access that then they accessed it through London. But I don’t think they have a clue how to do it anymore.”

The issue of tax also reared its head, at a time when insurers are waiting expectantly for progress on reform under the UK’s new coalition government.

The chief executive of Chaucer Holdings, Bob Stuchbery, said London had been too lax when it came to taxes, resulting in firms redomiciling abroad.

“We could have made the city and the London market a venue of choice when it comes to things that are driven by tax. This could have prevented start-ups over the past decade choosing to do that elsewhere,” he said.