Lloyd's Pushes For Reform Plan's Passage
NU Online News Service, Aug. 30, 10:14 a.m. EST?The deputy chairman of Lloyd's of London, John Coldman, last night urged members of Lloyd's to unite behind proposals for the 300-year-old insurance market's modernization.
Speaking in Canada, Mr. Coldman told an audience of insurance professionals that he believed the 16,000 members of Lloyd's must put any differences behind them if the market is to instill confidence in its policyholders and backers.
"Policyholders need to be confident in their insurer. A Lloyd's divided by internal tensions will not inspire confidence," said Mr. Coldman, speaking at a seminar for Canadian insurance brokers and intermediaries that was held in Toronto and organized by Lloyd's.
"There is a time for debate and a time for unity. Yes, we must have a debate in the run-up to our Extraordinary General Meeting on Sept. 12, but ultimately we want to see the market's financial backers unite behind these proposals," he said.
"While the world's major insurance companies are able to have their debates in the privacy of a closed boardroom, we at Lloyd's must do so in the full glare of public scrutiny," he added. "This is not necessarily a bad thing; after all, we are seeking to encourage greater transparency. But it does mean that our disagreements are on show for the world to see, including our major competitors."
Mr. Coldman said, "we all know that a unified society is a stronger society. It is that unity of purpose and commitment that will propel the reformed Society of Lloyd's into an even stronger business position."
Mr. Coldman also argued that the interests of Lloyd's five million policyholders must be at the heart of the reform process.
"Ultimately the true test of our reforms will be whether they bring benefits to our policyholders. I believe they will," he said. "With the creation of the Lloyd's franchise, the great dramas associated with our financial performance in recent years–both the highs and lows–will be better managed. That can only mean fewer issues for the market to deal with internally, so therefore more resources to focus on overall customer care, product development and claims management."
He added that "we should never forget that without policyholders, there would be no Lloyd's. This is the simple truth that must always be at the center of our thinking. We can discuss the pros and cons of unlimited liability until we are blue in the face, but unless that debate focuses on the needs and priorities of our policyholders, it is a debate taking place in a vacuum."
He said the leadership of Lloyd's "believe the reforms being proposed are of considerable benefit to our policyholders. That is why we are seeking support for them."
The proposals are the result of work initially carried out by a group led by Lloyd's Chairman Sax Riley, and a wide-ranging consultation process that began in January this year. Formal consultation closed on Aug. 16. When implemented, the proposals will increase the transparency, efficiency and profitability of the Lloyd's market, its architects believe.
For more information on the reform plan, go to LloydsOfLondon.com.
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