View from City Road: Lloyd's overdue for an overhaul
Wednesday 18 May 1994
No company could sustain that level of deficit and hope to survive; to most names, Mr Rowland's comments must sound like crass and monumental complacency. He is cleverer than that, however. The best form of defence is often attack and Mr Rowland's plan is to change the agenda, to try to get everyone to believe that the problems of the past are being isolated so the market can get back to business.
It's a hard task which every piece of bad news makes that much harder; the market's long-term future is intimately bound up with whether it can attract new investors - the old ones are leaving in droves.
A series of legal actions is now reaching the courts, and it is widely acknowledged that Gooda Walker names have a strong case. Some form of new settlement offer is possible in the summer or autumn, and the cost may ultimately be borne by the market as a whole.
Losses on pollution insurance underwritten in past years are seemingly unstoppable unless the US government steps in. And new corporate investors are having second throughts about whether they are truly isolated from the costs of past losses.
With such a stream of bad news how can the market expect to keep enough members on the books to carry on?
The official position is that Lloyd's will muddle through, picking up extra corporate and private underwriting capacity as prospects improve. It's possible, but not nearly as likely as Mr Rowland would like to pretend.
Even if he is right, however, and there are enough sincerely rich private investors and corporate names to plug the gaps left by the impoverished middle classes - which are sensibly finding other homes for their money - should Lloyd's be allowed to get away with so little change in the way it is run?
Compared with the securities and banking industries, Lloyd's is still woefully under-regulated and under- supervised. Minor reforms so far in place are not enough to assure potential backers.
The Department of Trade and Industry should use the annual review of Lloyd's solvency in September to insist on further changes. After all, Lloyd's cannot trade without its certificate.
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
- 1 The future of sex: The first female condoms were derided, mistrusted and shunned - but will their modern counterparts catch on?
- 2 South African rhino finally put down after roaming Kruger park for days with horn hacked off and bullet in brain
- 3 Italian pensioner hires an escort who turns out to be his son's girlfriend
- 4 Orgasm machine to deliver climax at the push of a button
- 5 Liam Neeson turned down James Bond role to marry Natasha Richardson
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...