Battle lines drawn for Lloyd's succession: John Moore on the two front runners for the chairmanship

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The Independent Online
TWO CONTENDERS are emerging to succeed David Coleridge as chairman of Lloyd's of London. The power battle is likely to split the insurance market, which is suffering from more than pounds 2bn of losses.

It had been widely expected that David Rowland would be the preferred candidate to replace Mr Coleridge, who last week announced his decision not to seek re-election as head of the market. Mr Rowland is chairman of Sedgwick Group, the insurance broker, and the man who led the framing of the reform proposals to help Lloyd's develop over the next five years.

But professional underwriters fear their influence may be diluted if an insurance broker is allowed to head the market.

Insiders at the market say Stephen Merrett, chairman of the Lloyd's Underwriters Association, is preparing to run for the ruling council in elections later this year and has put himself forward as the 'underwriters' candidate'.

Last week, Mr Merrett surprised the market by writing to all members of Lloyd's marine insurance community, which is represented by the LUA. He told them that both he and his committee had decided to resign and seek re-election. The move was widely seen as an attempt to accelerate the reform programme.

'The LUA committee have taken the view that it is essential for all members of the market to make a greater contribution to the management of the Society's (Lloyd's) affairs,' said Mr Merrett. 'In particular, it intends to be vigorous in urging the involvement of market practitioners in the structural changes which must take place in the near future. In view of this, members of the LUA committee have seen a need to confirm the level of support from Lloyd's marine underwriters.'

Both Mr Rowland and Mr Merrett are expected to run for places on the ruling council. Who becomes chairman will be decided among their peers on the council.

Mr Merrett's letter to the marine underwriters is being viewed as an early manifesto. Mr Rowland has yet to declare his intention to run for chairman, although he has indicated to friends that he is prepared to do so.

Lloyd's underwiters, who regard themselves as the hub of the market, have long resented any internal political advantage the brokers might gain in running the market.

Very few insurance brokers have become chairmen of Lloyd's.

Whoever wins the post will find the role has changed. As part of the reform programme, the chairmanship would be a full-time job and other executive duties would have to be given up.

Stephen Merrett

Stephen Merrett, born in 1939. Educated as Rendcomb College and Oxford University. Spent a short period of his early career as an insurance broker, before joining the family underwriting business, which had been founded by his father. Took control in 1976 of the Merrett agency group, which he built up into one of the largest and most influential agencies at Lloyd's. Served with Mr Rowland on the task force that proposed the current reform programme. Has served two terms on Lloyd's ruling council, and was instrumental in securing a pounds 116m out-of-court settlement for many members of syndicates under the management of the RHM Outhwaite agency.

David Rowland

DAVID Rowland, born in 1933. Educated at St Paul's School, west London and Trinity College, Cambridge. Built his reputation during the 1970s by turning round the troubled Stewart Wrightson broking group and then merging it with rival broker Willis Faber in 1987.

After merger proved not to be a success for Willis, left to join Sedgwick, Britain's largest independent broker, in March 1988 where he is now chairman. Contract in that post recently extended. Asked by David Coleridge at the end of 1990 to come up with proposals on how Lloyd's should develop over the next several years. Report published in January.

(Photograph omitted)

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