Outsider Levene to be named as the new chairman at Lloyd's of London

Lloyd's of London will today name Lord Levene of Portsoken, a former Lord Mayor of London and a veteran of both the City and Whitehall, as its new chairman.

The move is a dramatic break with tradition for Lloyd's, which has never appointed an outsider of the historic insurance market as chairman.

The appointment, to be formally voted through by the Lloyd's governing council today, is recognition by management that it urgently needs to bring in new blood to invigorate the organisation at one of its most testing periods in its 300 years. Lloyd's suffered its biggest one-off loss from the terror attacks on 11 September and has not been in profit for five years.

Lord Levene, who will take over from Sax Riley at the end of the year, will have to guide Lloyd's into a new era, including changing its accounting rules and ending the practice of breaking up the market and re-establishing it every year.

Lord Levene, 60, joins from his position as vice-chairman of Deutsche Bank in the UK. He was chairman of the bank's European investment banking business until March, when the division was reorganised.

He previously won respect in the City for playing a key role as chief executive of Canary Wharf in turning around the fortunes of the property group when it almost collapsed in the 1990s.

Lord Levene has also accumulated experience and contacts in the public sphere, having been head of procurement at the Ministry of Defence and acted as adviser to John Major, Britain's last Conservative prime minister.

Recently Lord Levene played a crucial part in finding a solution to the Government's need for a new radio system for the Army.

Lord Levene, a graduate from Manchester University who speaks German, French and Italian, is also chairman of the European arm of the US company General Dynamics and a non executive director of J Sainsbury.

Lloyd's has been searching for a new chairman for months, after Mr Riley announced his intention to stand down in December. Unlike his two predecessors, Lord Levene will have the advantage of joining at a time when Lloyd's is due to break into profit, as its members benefit from enormous rises in premiums after the disastrous events of 11 September.

One executive in a Lloyd's insurer welcomed the appointment, saying: "He is a meaty beast and comes after a few people who were pretty disappointing."

Nevertheless, the reforming process had already begun under Mr Riley, who unveiled a series of changes for Lloyd's earlier this year.

Mr Riley said radical change was necessary for the market to compete against modern corporate giants such as AIG of America and Munich Re. Lloyd's is also battling against the rival insurance market in Bermuda. Mr Riley grasped the thorniest problem at Lloyd's, which is the future of the individual names who still provide substantial amounts of capital for companies that operate in Lloyd's.

Mr Riley wanted to persuade names to leave the market, in return for compensation for the loss of their membership rights. Lloyd's has now backed down from this target, after failing to persuade names to go.

But the organisation will press ahead with other targets, including ending the three-year accounting system and bringing it into line with other companies that report their results annually.