With more than 325 years of history behind it, Lloyd’s of London is one of the City’s most venerable insurance fixtures – but that hasn’t prevented it from moving with the times, according to chairman John Nelson.
“I’ve seen a lot more diversity here than when I started three years ago,” Nelson said, and praised chief executive Inga Beale, the first woman to take the post at Lloyd’s. “Inga’s experience and skill is great for us.”
Nelson, a former investment banker, said Lloyd’s is keen to pursue a wide variety of diversity as it looks for greater international expansion as part of its “Vision 2025” goals.
“We’re looking at not just increasing our gender diversity, but also diversity of nationality, to help provide insight and understanding as we pursue our goal of increasing our footprint in a range of major overseas territories.”
Most of Lloyd’s insurance business is still concentrated in the US, UK and continental Europe, but Nelson says expansion into growing markets such as South America and Asia are a key focus ahead.
“On the Asian front, while there are restrictions on direct foreign investment in the insurance market in India, we have hopes of more liberalisation ahead. We also have a hub in Singapore and a strong interest in China, where we just got government approval for a Beijing branch office,” Nelson said.
Nelson, a trustee of the National Gallery, paints a picture of an increasingly competitive insurance market that has still delivered positive results for Lloyd’s recently, but with a number of risks ahead, including the growing scale of geopolitical tensions.
“It’s a concern for us, particularly the impact on growth prospects for the global economy, which are key to our long term plans, and there are dangerous signs of protectionism creeping back in some areas of the world, which I’m very vocal against.”
Nelson also said Lloyd’s is very aware of the long term risks of climate change for the insurance industry.
“It’s something we take extremely seriously. We’ve already seen measurable sea level rise on the US east coast for example, and we’ve got improving realistic disaster scenario models.”
Closer to home, Nelson is happy with an improved business environment in London, but thinks greater heights can be reached with more positive policies.
“I think the 20 per cent corporate tax rate has been good for attracting business to London, and we can see that physically in the rate of construction going on and new firms moving in.
“However, we need to avoid overly bureaucratic, expensive and time consuming regulations.” Nelson said.
Nelson is also positive on staying in the EU, saying: “While there is clearly need for reform to modernise the EU and make it more competitive, I believe it’s in Britain’s long term interest to remain a full member of the EU.”
LLOYD’S OF LONDON HAS SOLID START TO 2014
■ Lloyd’s revealed a strong set of results yesterday for the first half of 2014, with pre-tax profit up 21 per cent to £1.67bn.
■ The specialist insurance and reinsurance firm said that it had been a relatively “benign” period for major catastrophes.
■ However Lloyd’s did note a number of serious aircraft crashes this year, including the two Malaysia Airlines disasters.
■ Lloyd’s also highlighted a rating upgrade it had received from Fitch in June of this year, from “A+” up to “AA-”.