Lloyd’s of London boss says that it’s important to get plans right for 2021 and not undo all the good work the market has done in previous years
To return Lloyd’s of London to long-term, sustainable profitability, its good progress to date must be maintained.
This was the message that Lloyd’s chief executive John Neal delivered during a virtual press briefing yesterday afternoon as he reflected on Lloyd’s progress, despite the “huge impact” that the pandemic has had on the London Market.
The press briefing followed Lloyd’s releasing its first half results yesterday, revealing that it expects to pay £5bn gross in claims.
Neal admitted that Lloyd’s overall results were - “as expected” - being impacted by Covid-19, however its underlying results had improved vastly.
He said: “We must and we will continue to build on the progress we have made so far. It’s important that we get the plans right for 2021 and that we do not undo all the good work that we have done through 2018, 2019 and 2020. Yes of course we can support growth, it’s the right risk at the right price. We have got to keep our eyes on that performance ball and we have got to return Lloyd’s to long-term profitability.
“It’s clearly important that we get into a rhythm of continuous improvement and management. We have got to maintain this good progress that we have made into the long-term if we are to return Lloyd’s to long-term sustainable profitability.
“Looking forward, we will continue to support our cooperation and the market in their efforts to return to the Lloyd’s building. The way we have reconstituted the building, safety is of paramount importance and we were delighted to reopen the underwriting room as we said we would and celebrate that officially on Tuesday this week.”
Meanwhile he also discussed the achievements Lloyd’s has made thus far.
Strong and resilient enough
Neal additionally spoke on how Lloyd’s has coped with the coronavirus pandemic.
“It would be remiss not to begin the discussion without talking about Covid-19 and recognise just how challenging the past five month period has been for our people, our customers, for the industry as a whole and of course the economies in which we do our business with insurance, he continued.
“Our infrastructure has stood up really well and we have continued to deliver as a marketplace and for our customers. The market is exceptionally well capitalised. And we have the ability to withstand even severe events like Covid-19, we have the unique ability to recapitalise in-year and that is exactly what has been executed into 2020, so we are strong and resilient enough to pay all valid claims arising from Covid-19, we are strong and resilient enough to withstand catastrophe losses you might expect in the second half of the year.”
However, he added that “it is right for us to be conservative” and adopt a defensive stance to its portfolio considering the way in which the economy might play out.
Neal said that Lloyd’s staff have been priority “because if we do not look after our people, then they cannot look after our customers. It has been a key focus for us during the lockdown period.”
Lloyd’s has supported its staff in various ways, these measures have been shaped through employee feedback. This includes:
- Day-to-day interactions
- Online tools inside modules
- Wellbeing initiatives
- Mental Health Awareness week
Lloyd’s has also set aside £15m in seed capital to develop a “systemic risk centre of excellence” and provide insurance for catastrophic events.
Discussions around its open source concepts for global recovery will continue, these include: Restart, Recover and Black Swan.