Lloyd's to be given new look as a business
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Your support makes all the difference.The Lloyd's insurance market is to overhaul its own central organisation to give it a more business-like shape, Ron Chandler, the chief executive, announced yesterday.
Weeks after the completion of a pounds 3.2bn rescue plan, Mr Sandler said the restructuring would split Lloyd's central services department, with turnover of pounds 180m a year, into five new business units, each of which would have its own managing director and managing board.
Mr Sandler said: "They will be run as businesses with as much bottom- line discipline as can be engineered."
The restructuring comes after a detailed consultation with members and is a response to widespread criticism in the market of the way Lloyd's is managed internally.
Rather than a direct result of the rescue plan, it appears to be a case of catching up on reforms that were put to one side as the market struggled to survive after losing pounds 8bn in a few years.
Firms told Lloyd's that they wanted greater transparency of activities, including costs and charges, more accountability and responsiveness and wider choice of where they buy their services. They will be charged for what they use, rather than flat fees.
As part of the plan, Lloyd's intends to open up some services to outside competition, so firms in the market can choose whether to buy from Lloyd's or from independent companies. At the same time, Lloyd's wants its new business units to seek work outside the market, from the rest of the insurance industry in the City. Mr Sandler said: "If a unit is not proving responsive to the needs of the market the demands for its services will atrophy."
The restructuring is separate from Lloyd's plans for cost reductions but Mr Sandler acknowledged that more jobs are to go among Lloyd's staff and contract workforce of 2,400.
He said: "Inevitably, in a business in which people are an important part of the costs I anticipate that there will be job losses."
The five new businesses are members' services, which includes financial housekeeping for the membership, and insurance services, which embrace the policy-signing office and the claims office.
The others will be facilities management, ; business development; and North America, which will promote the market and liaise with regulators in the US and Canada.
The units will each be responsible to a user board which will include representatives from the market. Mr Sandler said the new structure would allow the board of the market, chaired by David Rowland, to focus on strategic and longer-term issues.
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