In the past 12 months we have seen a renewed spirit of collaboration between the market and the Corporation. This partnership has been most evident in the work on new conduct standards and our modernisation agenda. It has also been plain to see in preparations for the new Solvency II regulations which are due to come into force on 1 January 2016. We have been working on Solvency II for the past eight years; our efforts intensified during 2014 and will continue throughout 2015. Securing approval for our internal model in support of these new capital requirements is a key objective.

In 2014, three new syndicates joined Lloyd’s, each one bringing particular benefits. The market also welcomed three new special purpose syndicates. These are proving a popular way for existing and new capital providers, particularly from developing markets, to participate in Lloyd’s.

In the wider industry, a persistent imbalance between capital and risk is triggering increased competition, making organic growth difficult. In this context it is unsurprising that there has been a spike in M&A activity; the same happened in the mid to late 1990s. We expect this trend to continue through 2015 and accept the gauntlet that this consolidation throws down – to protect and promote the diversity of the Lloyd’s market. It is for the Corporation and the market to ensure Lloyd’s remains the best place for writing specialty insurance and reinsurance business, and that existing and new customers around the world know that.

During 2014 we set out eight Strategic priorities that we believe to be critical to our future success as a business: Market oversight, Ease of doing business, Global market access, Capital, Innovation, Talent, Brand and Global Corporate Social Responsibility. You will find a commentary and update on progress against these priorities in the later pages of this report. They are our lodestars, not for putting up on a dusty shelf but to be used every day.

Taking an example, if we look at Ease of doing business, we are refreshing the central services which the market relies upon. During 2014, we completed the first phase of the Claims Transformation Programme; this has brought down the average time taken by Lloyd’s to pay a claim after settlement request to 11 days. The publication in November 2014 of London Matters, a report commissioned by the London Market Group, has helped us to further scrutinise the competitive advantages of the London market. We are committed to playing our role as part of a flourishing insurance sector and a thriving UK economy. Our own Vision 2025 plan precisely addresses these challenges and opportunities.

North America remains the largest market for Lloyd’s and we saw growth again here in 2014.

Our global story finds voice in our talent strategy. We are determined that Lloyd’s should reflect the world in which we operate, that we continue to attract the brightest and best to the market and that the background and perspectives of our people match those of our customers and the geographies in which we transact. The 2014 launch of our diversity agenda, Inclusion@Lloyd’s, was a rallying cry for the market and so far 90% of managing agents have signed up to its charter.

We will continue our engagement with brokers and underwriters around the world to ensure Lloyd’s remains at the forefront of innovation in the sector – whether that’s developing new products such as cyber or improving process efficiency.

Innovation is the natural response to new challenges. All that Lloyd’s has seen, all that it has lived through during the past 327 years, only serves to remind us that in this world, change is the only certainty.

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