Demutualising is `not on any agenda' at Lloyd's of London

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The Independent Online
LLOYD'S OF LONDON, the insurance market, denied yesterday that it is considering demutualising its ownership structure, although it is actively considering ways to modernise the 300-year-old market.

Nick Prettejohn, the chief executive, admitted that the subject of demutualisation had been raised by members influenced by the plans to demutualise the London Stock Exchange. He said: "A number of people in the market have suggested it may be a good idea if Lloyd's demutualised. It is an interesting idea but we are not currently discussing it and it is not on any agenda of any scheduled meeting. We are pursuing all sorts of ways to modernise the market and ensure it remains competitive."

Demutualisation would yield a potentially huge windfall for Lloyd's members. The precise ownership structure of the market is unclear though it is controlled by the Lloyd's Society, which is made up of all those who provide capital for its operations. Around 67 per cent of Lloyd's capital is provided by 400 corporate members and the remainder by about 4,500 Lloyd's Names, the individuals who pledge their assets to underwrite polices. About 7 per cent of Names have transferred from unlimited to limited liability after huge claims in the early Nineties.

Some Lloyd's members feel a change of structure would make Lloyd's more responsive to market needs and make decision-making easier. It is thought some members feel demutualisation would be a neat method of removing Names from the picture altogether.

Meanwhile Equitas, the re-insurance vehicle that was set up by Lloyd's to pay off a backlog of claims, reported a pounds 54m surplus after tax for the year to March. Equitas now faces pounds 14.3bn in claims liabilities, down from pounds 21bn when it was created in 1996.