In an unprecedented public protest a group of 110 underwriting members had called an extraordinary general meeting, led by a businessman, Claud Gurney, to call the governing body of Lloyd's, the council, to account.
Up to 2,500 underwriting members attended the meeting, with many calling for the resignation of David Coleridge, 60, the market's chairman, and the other 27 members of the council.
Market insiders have been accused of taking on profitable insurance business themselves and leaving outsiders to shoulder an unfair share of the losses. One member accused Lloyd's of standing by while 'we were swallowed by sharks in murky waters'. He added: 'I was seduced by your council to join Lloyd's. It is my view that your council has not looked after our interests and evil has triumphed.'
Another member called on the council to resign 'if they had an ounce of honour'. The council, he said, had been guilty of 'negligence, impotence and indolence. The council has failed to protect the names (the members) and the names have been fleeced.'
Another member said that his family had been forced to put 'a beautiful Georgian listed house on the market' because of the losses. If individual members of Lloyd's do not have enough financial resources lodged at Lloyd's they have to be prepared to meet insurance claims from their own money. Many face financial ruin.
Mr Coleridge tried to head off trouble at the start of the three-and-a-half-hour meeting by announcing that he did not intend to seek re-election as chairman at the end of this year. He added that he was 'delighted' that David Rowland, a senior Lloyd's broker and chairman of Sedgwick Group, 'is willing to serve as the next chairman of Lloyd's. I have recommended and the council has accepted that he be nominated for this post, subject to his election to the council by the normal democratic process at the November election.'
Although Mr Rowland has served on Lloyd's council in the past he is not a member of the present ruling body. To be chairman he will have to gain a place on the council. 'With the goodwill of his fellow workers at Lloyd's he will be swept back into power,' said one Lloyd's official.
Dissent is growing in the market that Mr Rowland is being foisted on the membership by an outgoing chairman who enjoys little confidence among the names.
Under Lloyd's constitution the chairman must be a professional person who works in the market, either an underwriter or broker, rather than an outsider with broader business experience. Mr Rowland, 58, said after the meeting yesterday: 'It is a great pity that Lloyd's does not have a free choice in its choice of chairman and cannot choose who it wants from both outsiders and insiders.'
Mr Rowland will become the first salaried chairman of Lloyd's. If he gains office his remuneration package is not expected to be less than that he is receiving at Sedgwick Group, where he earns up to pounds 500,000 with incentives, including a salary of more than pounds 360,000.
'My terms of employment will be agreed by Lloyd's. Of course I am concerned about my financial position,' said Mr Rowland. He will have to relinquish his chairmanship of Sedgwick and yesterday his group announced management changes anticipating his departure.
Until now chairmen of Lloyd's have been unpaid, although they have received salaries and financial benefits from the firms they work for in the market.
During the meeting Mr Gurney was critical of Mr Rowland's nomination. 'We want an independent chairman. Anything else is unacceptable.' He claimed that Mr Rowland headed a company, Sedgwick, which had placed substantial parts of the current loss- making business in Lloyd's.
Professional underwriters in the market would like to see an underwriter become chairman rather than an insurance broker. Stephen Merrett, a distinguished underwriter who chairs the agency company Merrett Holdings, is favoured by many of his peers.
During the meeting Dr Mary Archer, a member of the Lloyd's ruling council and wife of the novelist Lord Archer, rallied to the support of the Lloyd's establishment. She argued that Lloyd's would become an open drain on members' funds if it agreed to provide financial support for members to take legal action to recover their losses.
Lloyd's is now carrying out a postal ballot on five resolutions lodged by the members on the conduct of the market's affairs. The ballot will be completed at the end of next month.
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