These excellent results were achieved against the backdrop of continuing extremely low interest rates and softening premium rates, counter balanced by a second consecutive year of few major claims on the Lloyd’s market. Lloyd’s financial position remains strong. Our rating strength with Fitch is AA-, Standard & Poor’s A+, and A with A.M. Best.

As you will read in this annual report, while Lloyd’s has some great opportunities it is also facing a number of challenges. First, is the challenge of excess capital, partly caused by low interest rates, coming into the industry – lowering premium rates and in part changing the way in which business is being structured, particularly in reinsurance. Maintaining underwriting discipline in these conditions is important and is something which the Franchise Board and the Council are focused upon.

Second, in order to retain and strengthen its global competitiveness, we must ensure that the Lloyd’s platform becomes more efficient and user friendly. We are now making good progress in modernising our platform. I feel we have real momentum with excellent collaboration across the market, both with managing agents and brokers.

Third, the current global economic picture is mixed. While we are seeing strengthening levels of economic growth in the US and in the UK, in continental Europe the picture is subdued. Insurance penetration in the developing markets remains low; volumes are growing at lower rates than previously but are still higher than the developed economies.

Lloyd’s makes great efforts to communicate the economic and social benefits of increasing insurance penetration to the governments of these countries. We particularly emphasise the value of international diversification of their insurance markets leading to greater and sustainable economic growth.

Part of Vision 2025, our long-term strategy, is improving global access. We are making excellent progress. We obtained a branch licence in Beijing and permission to open our platform in Dubai and a representative office in Mexico City. We are also working hard on opening up new markets particularly in India (where legislation has recently been passed to enable Lloyd’s to operate) and Turkey, and to expand Lloyd’s trading rights in Malaysia and Colombia. The continued development of business in our established markets of North America, Europe and Australasia remains of fundamental importance.

2014 brought a considerable increase in work load for the Franchise Board, driven by changing market conditions, the development and implementation of our strategy, and regulation - not least Solvency II. I want to thank the Board members for the effort and commitment they have made.

John Parry succeeded Luke Savage as Director of Finance during the course of the year. I warmly welcome him into this role and thank Luke for ten years of Lloyd’s service. Dominic Christian, Karen Green and Fred Hu joined the Council, and we said goodbye to Graham White (previously Deputy Chairman) and Nick Marsh. I want to pay a particular tribute to Graham for his tremendous support to Lloyd’s over many years; he has been a loyal figure at Lloyd’s and has always given wise counsel. Andrew Kendrick will retire from the Franchise Board at the end of this month; I thank him and Nick Marsh for their support and commitment. Joy Griffiths, Sean McGovern and John Parry joined the Franchise Board in 2014.

I would also like to commend our Chief Executive, Inga Beale, and her team for the work they are doing on behalf of the market. The managing agents and brokers continue to demonstrate their extraordinary support and enthusiasm for the Lloyd’s market. For this I am truly grateful.

Finally, we had the great honour of a visit by Her Majesty The Queen, accompanied by the Duke of Edinburgh, to the Lloyd’s building in March 2014. It was an uplifting day, which all of us will remember for a long time.

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