As a young banker working on the 20th floor at Kleinwort Benson in the early 1980s, John Nelson watched as the new Lloyd's of London building grew out of the ground a stone's throw away at 1 Lime Street. This was boom time in the City – Mr Nelson was part of the team working on the first Thatcher privatisation of British Aerospace – and merchant banks such as Kleinwort were the supermodels of their industry, sought-after beauties who only got out of bed for thousands.
By contrast, the Lloyd's insurance market was the ugly duckling, riven by fraud and scandal, and then huge asbestos and pollution claims, which even its glamorous new Richard Rogers-designed home failed to contain. By the late 1990s, the market was close to collapse.
How times have changed. The view from the lift as we travel down on the outside of the inside-out building from Mr Nelson's office on the 11th floor – he's now chairman of the insurance market – shows just how much and how fast.
"It's the only place in the City where you can see a bunch of cranes," says Mr Nelson, pointing across the road to the Cheesegrater building being finished at 122 Leadenhall Street, another Rogers special, to be occupied by the US broking giant, Aon.
To the south of us is the Walkie-Talkie skyscraper at 20 Fenchurch Street, to be occupied by US insurers as well as the UK's RSA, and once home to Kleinwort Benson, since gobbled up by foreigners.
There's more sky-rise to come, says Mr Nelson, closer by on Lime Street. Planning has just been given for a 38-storey skyscraper, ominously nick-named the Scalpel, that is to be the European HQ of another US insurance giant, WR Berkley.
EC3's developers are British but the hot capital flowing into the insurance industry is still from the US and also increasingly from China. Indeed, China Re, the country's biggest reinsurer, recently linked up with the UK's Catlin, while the country's second-largest insurer, Ping An, has just bought the Lloyd's building for £260m.
But there are no plans for the market to move just yet, he says, although there is a break clause in the lease in 2021. Thank goodness for that: it's the only big physical floor left in the City and one of the few places that still thrills with its cathedral-like pillars and Heath Robinson-style escalators.
We are now at ground level and the market floor is buzzing as about 5,000 men and women go about their business, still crowding around the 1,000 or so boxes – traditions die hard at Lloyd's – to calculate the risks on anything from the world's top racehorses to satellites in outer space. The lunches are still longish too. As chairman of the market's council, Mr Nelson has to spin three plates in the air at once; he's chief regulator, administrator and ambassador.
The juggling is going rather well. Last year the market, which is made up of 57 managing agents and 87 syndicates, saw a return to healthy profits of £2.77bn after one of its worst years in 2011, when it lost £516m after hefty claims following catastrophic floods and earthquakes. The return on capital was restored to a decent 15 per cent against a loss of minus 3 per cent. So far, this year is looking good too.
Yet while Lloyd's survived the financial crash in good shape, Mr Nelson has new concerns. With interest rates so low, he is worried that big institutional investors are investing too much money into the insurance industry in their quest for higher returns; most insurers are making double-digit returns. "There is the danger of an inverse pyramid developing which could lead to systemic problems. My fear is that the amount of capital coming into the insurance and reinsurance companies means that premiums will be pushed down, that there is too much competition."
While this may be good for the consumer, he warns that more competition leads to companies underwriting business too cheaply, and therefore unprofitably. The Prudential Regulation Authority, the Bank of England's watchdog, and uber-regulator of the insurance industry, is aware of the market's concerns.
He explains: "We want to avoid the problems which hit the banking industry, which were mainly the build-up of too much capital chasing risk, and the highly incentivised pay structures which encouraged people to take greater risk." While the issues are different – insurance companies have strict rules on the reserves they must keep - he wants to learn lessons from the financial crash. For example, Lloyd's is firmly committed to being a risk selector, rather than a capital provider, and has no plan to start trading in risk indices or insurance derivatives.
"I've got to be careful what I say as I've many friends still in banking but there's no question that there was a serious, searingly serious, cultural problem with risk in the whole of the banking community – not just investment banking. Some of the incentives being offered to senior management were excessively outrageous, leading to egomania on the part of many."
There are fewer egos at Lloyd's, or so he hopes: "Salaries seem to be fairly reasonable."
Mr Nelson has Mrs Nelson to thank for his timely switch out of investment banking nearly a decade ago. As an adviser at Kleinwort and then Lazard, the 66-year-old masterminded many of the most hostile bids of the time, including Granada's swoop on Forte.
His move to corporate life came while at CSFB Europe in 2002, where he was managing director: "I was offered two jobs, deputy chairman of Kingfisher and director of BT. Mrs Nelson said I would be 'mad' not to make the change."
Not many bankers have made the successful transfer but Kingfisher was followed by the chairmanship of Hammerson, the property developer, and then Lloyd's nearly two years ago.
His biggest challenge is taking Lloyd's footprint deeper overseas while also making the home market more international. Lloyd's members operate in more than 200 countries and the market has mini-hubs in China, Singapore and Japan. He wants to expand more: "At present 70 per cent of the world's GDP is in the developed world and the balance in the emerging one. But over the next 25 years those ratios will be the other way around, the emerging countries will have the bigger share, and we want a strong presence in those countries.
"Lloyd's is a tremendous long-term business opportunity which I rate higher than other sectors which are already more developed in emerging markets. At the same time we want more international talent working here in EC3 to mirror the origin of the market's business and capital."
The most pressing job to be filled right now is that of chief executive following Richard Ward's decision to quit after eight years at the end of the year: "Richard has done a fantastic job and we are currently in the middle of finding a successor."
It's not going to be Stephen Hester, the departing chief of Royal Bank of Scotland. Mr Nelson chuckles at the recent speculation: "I took Stephen, who used to work for me at CSFB, on a tour of the floor a few weeks ago and I think that's what set the rumours going."
But it will be someone with specialist industry knowledge as insurance is getting more complex by the day: Lloyd's wants to stay on the catwalk.