Your Excellencies, My Lord Mayor, My Lords, Minister, Ladies and Gentlemen:
Firstly, I would like to welcome such a distinguished group of guests to the Lloyd's City Dinner. This is the second year we have held this occasion and we hope that it will become an annual fixture.
When I spoke at this dinner last year, I wanted to explain how Lloyd's had emerged, phoenix-like, from an extremely difficult period to become a successful and highly respected institution again. Happily that position has, in the year gone by, been further reinforced and we can now, once again, present ourselves as a very credible leader within the UK Financial Services Industry, a position which we intend to retain, and to guard very carefully our restored pride.
So I no longer feel it necessary to stand here this evening to talk to you about the success of Lloyd's, and I believe that the fact that you are prepared to be part of this distinguished audience is testament enough to us that we continue to move in the right direction. And may I say how privileged I feel to have been invited by the Council of Lloyd's to extend my term as Chairman until November 2008, an offer which I was delighted to accept.
As we have deliberately assembled, on this occasion, an audience not just from the insurance industry worldwide, not just from the Financial Services Industry, but from the whole commercial sector, from our political base and from the media, I want to use the opportunity to express some of my own views about the way in which the Financial Services Industry, on a global basis, interacts with those different constituents.
How quickly and dramatically have the services offered by the industry changed over recent years. I remember that it was not so long ago when, if a UK company wanted to purchase another business elsewhere in the world, the need to obtain Government permission, Bank of England permission, Foreign Exchange authorisation, and indeed the acquisition of the foreign currency itself was a major and very time-consuming operation. Today, we would regard such a procedure as quite extraordinary.
On a more mundane level, I think most of this audience will remember things called travellers' cheques: today they are virtually extinct. It never ceases to amaze me that I can now step off a plane anywhere in the world and insert a plastic card into a slot and obtain local currency in a matter of seconds - and this in places where even 10 years ago it would have seemed unthinkable. For anyone who has visited China recently, you will understand precisely what I mean.
This is without doubt the true manifestation of the overused buzz word "globalisation". The Financial Services Industry serves the rest of industry. We all now take it for granted. We all now believe that it will work, and happily it is very rare that it does not work. If, however, for any reason it doesn't, then the media will ensure that we know about it instantly; and that globalisation of trade extends as well to media, to information, and to intelligence. Just 10 years ago, the notion that on landing anywhere in the world I would switch on this Blackberry and receive all my emails, and read the latest information transmitted by one of the news agencies within minutes of it happening anywhere in the world, would have been regarded, I believe, as rather outlandish science fiction.
This globalisation of financial services is an extraordinary phenomenon. I shall not attempt this evening to try to emulate our new Lord Mayor, who I am delighted to welcome here this evening, in singing the praises of London. He now has some 700 speeches ahead of him and visits to countless countries to promote the success of London, and I know that he will do it extremely well.
But however successful London is, it is nonetheless part of this huge global network, and one which has been put together with enormous care, under enormous pressure, and with huge competition. I have always been a great supporter of competition and believe that it is the best means of ensuring the highest quality service on the most competitive terms. Those who do not subscribe to this doctrine, undoubtedly fall by the wayside very quickly.
Of course no competitive economy can operate without a significant degree of risk, and we need such risk to prove the robustness of our system, and where individuals, or single corporations, get it wrong, those very flaws are exposed very quickly. It is, of course, in terms of seeking protection against risk that the insurance industry, where once again Lloyd's is happily playing such a lead role, can offer security to the world economy. Again, globalisation is to the fore. Just 3 years ago, we were reeling from the shock of horrendous terrorism. But in talking about this subsequently and of the protection that our industry was able to offer, I urged those to whom I spoke around the world not to forget natural disasters. Unsurprisingly, just a few weeks ago, we saw an unprecedented 4 hurricanes follow within weeks of each other, almost along the same path. For our part, Lloyd's will have paid out over $2 billion without demur, and, happily, still, I believe, be able to report some very positive results for 2004.
Does everything always work as it should? Unfortunately, not all the time. There is criticism, and there are mistakes. You will no doubt be aware of the recent unhappy developments in this respect in the US. That has raised some important issues about disclosure and transparency which the industry must address. Tonight is not the time to reflect more deeply on that ongoing process. Nonetheless, the fact that so many leaders of the world insurance industry, especially those based in the US, have made the journey to join us this evening, is again testament to the international nature of our business and the need for us to see each other frequently and to meet our end users, the policy holders, who pay the bills and who are also with us this evening.
Of course, the centre piece of the world's Financial Services Industry will always remain the banking system. One of Lloyd's oldest and pre-eminent partners in the banking world is Citigroup, and this evening we are very privileged that Charles Prince, Citigroup's Chief Executive, has agreed to be with us this evening and to talk to us. Citigroup is, in many respects, a microcosm - admittedly a pretty big microcosm! - of globalisation. Under the symbol of the red umbrella that we know so well, are united an extraordinary range of cultures, businesses, skills and products. The development of Citigroup into such a powerful worldwide force is testimony to entrepreneurial vision, skill and determination which we can only applaud. Mr Prince has been with the group for 25 years, working his way through the organisation with great distinction and became CEO last year. Chuck, we are delighted that you accepted our invitation to speak to us tonight.
Ladies and gentlemen we are proud of our industry, we are proud of the wider Financial Services Industry and we are very proud of the success of the global economy which we serve and in which we all have to work together to ensure the world's future success. We want to continue to work in your interests and I know that I speak for my colleagues, throughout the wider industry, in saying how important we believe this to be.
Thank you all very much for being with us this evening, thank you all for listening and may I now ask my colleagues at Lloyd's to stand and join me in a toast to our guests and, in particular, our principal guest, the Chief Executive of Citigroup, Mr Charles Prince.
Sources
1. Lloyd's Risk Management, November 2004
