NEW YORK--In his first public address to a U.S. audience today, Lloyd's Chief Executive Officer Richard Ward guaranteed a transformation in the world's oldest insurance market by year's end--promising greater contract certainty, electronic processing of all new claims and direct access for outside brokers.

"If we don't achieve these goals by the close of 2007, I might be looking for another job," he quipped in a speech here this morning before the New York Chapter of the Risk and Insurance Management Society and the Association of Professional Insurance Women.

Mr. Ward guaranteed that Lloyd's under his stewardship will rid itself of the "two jumbo jets" full of paperwork "clogging up the process" and improve turnaround time, product quality and lessen the expense of doing business.

"This business has not embraced technology," he said, adding that "fear will be the driver for change, given the threat of competition coming from Bermuda right now, then closer to home from Dublin, and before long probably from Dubai or somewhere else without our legacy issues."

However, streamlining the market's operations and cutting costs with new technology "doesn't mean closing the underwriting room," he said, emphasizing that face-to-face meetings with syndicates to shop risks will not intentionally be phased out anytime soon.

"But all the functions supporting the underwriting room could benefit by going electronic," he said. "We want to get human hands out of the process as much as possible."

When asked when clients would see a real difference in how Lloyd's does business, he said "you already do, in that we're delivering 90 percent" of contracts to buyers within a month of a policy's inception, promising to continue to improve on delivery time as the year progresses.

By year's end he also vowed that "all new claims will be processed electronically. Our goal is to build a system offering electronic documentation in a single repository offering global access."

In addition, he promised to "open up the brokerage system" to allow buyer representatives from around the world to directly approach Lloyd's for quotes.

He said "it is not an appropriate structure" to limit access to underwriters to a group of London-based intermediaries. "If Lloyd's brokers add value, people will pay for their services, but we can't build artificial fences to protect broker relationships with clients."

Beyond operational challenges, Mr. Ward said another goal is to end the "herd mentality" historically driving underwriting behavior across the insurance industry.

"When rates start falling off a cliff, we don't want everyone in our market racing to jump off with them," he said. "We are trying to smooth out the cycle so that we don't fall victim to such extreme peaks and troughs."

As the commercial insurance market softens globally, he said, "we will encourage our people to hand back capital if it can't be profitably employed. Give the cash back to shareholders if it doesn't make sense to write the risks at the prices out there."

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CEO Promises Transformation At Lloyd's

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