LLOYD’S UNVEILS AGENDA FOR REFORM

August 5, 2002

Lloyd’s of London has published proposals for reform that will transform it into a modern, transparent and profitable marketplace. In a 56-page consultation document, which goes out to some 16,000 businesses and individuals, the Chairman’s Strategy Group sets out detailed proposals for change, which have won widespread support inside the market during six months of informal but intensive consultation. Lloyd’s Chairman Sax Riley, who leads the group drawn from all sections of the market, said, “This document sets out in detail the map to a new Lloyd’s. The proposals we are formally consulting on now are sweeping, but sensible. They represent the best opportunity of transforming Lloyd’s into a modern, transparent and profitable market. Everyone involved in this market, from investors to policyholders, wants to do business in a competitive and disciplined environment. No one wants a repeat of the substantial losses we have had in recent years. So standing still has never been an option. Businesses inside the market are now uniting around a common goal of reform. And now is the time to reform—trading conditions are at the strongest they’ve been in a decade and investment is at an unprecedented high, with record capacity of over $18 billion.” CEO Nick Prettejohn added, “At the heart of these reforms is the creation of a franchise, a new partnership between the businesses in the market and Lloyd’s, which runs the market. In the past a minority of poor performers have run up damaging losses, and we all paid a heavy price. He continued, “The proposals we are announcing today allow us as the future franchisor to monitor and guide the franchisees—the

businesses in the market. A Franchise Performance Director reporting to the new Franchise Board will lead the drive to raise business standards and identify business problems before they damage the market.”

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