60 seconds with John Nelson
Fri 11 May 2012
Lloyds.com spoke to John Nelson, Lloyd’s Chairman, about the new Vision 2025
What is Vision 2025?
The essence of this strategy is to make sure that Lloyd’s becomes the true global hub for specialist insurance and reinsurance by 2025. We are the only physical insurance market in the world, but the majority of our business comes from the English speaking world.
The challenge we have is to grow the Lloyd’s footprint into developing countries. So the vision sets out that Lloyd’s growth, over the cycle, should at least match GDP growth in individual countries, and in some fast growth territories we should be looking to exceed this.
Lloyd’s writes business in over 200 territories. Isn’t it already international?
Lloyd’s is an international business, but I think that globalisation gives us an opportunity to be more than that, that London EC3 can be the global hub for specialist insurance.
This isn’t just about writing more business. It is about attracting capital and foreign insurers into London. The growth of countries like China, Brazil and India will inevitably lead to more business being written, and that will need new capital to support it, and more insurers.
Why did you decide to come up with a vision?
This vision has been produced by the market itself rather than the Corporation. But part of the reason I took the job as Chairman was because I thought that there was a real opportunity here, over the longer term, to grow. So I was pleased to see a remarkable degree of consensus, including from the brokers, who have been extremely supportive of Vision 2025.
So is the vision very different from the three year plan?
Vision 2025 is very different from the three year plan, which concentrates on the shorter term business priorities. It takes a much longer perspective – it is about growth over the whole cycle. Clearly over the last few years, market conditions have meant that our ability to grow the business has been limited, and this remains the case in some areas. The focus at the moment is very rightly on underwriting discipline.
The vision is very focused on emerging territories. What about the other markets?
I‘ve just got back from RIMS in Philadelphia – the US is our largest market, and is likely to stay that way. As US GDP grows, so should our business. The vision isn’t about restricting any business, it is about opportunity.
There’s an opportunity for Lloyd’s and for the US, in the high growth economies. What I hope to see is a situation where brokers are extending their networks, picking up new business across the world and placing it at Lloyd’s. This would be a truly global industry, with Lloyd’s at the heart of it. Aon’s decision to move their headquarters was a sign of confidence in the Lloyd’s market and I know that the US insurance industry is fundamental to realising our vision.
So what will still be the same in 2025?
Quite a lot! We will still be a subscription market with partly mutualised capital, as I can see the value which our unique capital model gives to brokers and to clients, and the market structure has traditionally driven innovation. I want to see a focus on this. And, of course, we will stay in London.
Anything else on your wish list for 2025?
Modernisation. We won’t achieve our aims without efficient market processes, at all stages from placing a risk to paying a claim. This is a short and a medium term priority which is critical to becoming the global hub for specialist insurance.
Are you confident you can achieve this vision?
This will be challenging, but I‘m confident. The big strength of the Lloyd’s market lies in the thousands of trusted relationships within it. Attracting business, capital and people from new markets plays to our strengths.