Lloyd’s CEO John Neal (pic) has warned the market that there will be no end to the scrutiny of its performance.
Speaking as the market delivered its messages for the year ahead to underwriters and brokers, Neal said the challenges posed by the COVID pandemic have seen Lloyd’s decide it would undertake a thorough review of the syndicate plans in the first quarter of next year to ensure that the syndicates remained on track.
While he said the market expects to pay out around $5 billion in COVID related claims Neal warned that the world was entering the “most complex recession in history” and as such the was a need to ensure that the impact of the recession did not throw the agreed syndicate plans into doubt, particularly for the casualty classes.
He said the year’s business plan authorisation process had been smoother that last year with all capital plans approved.
The hardening market had enabled underwriters to deliver plans that will see capacity increase by 6% for 2021. However, Neal said that the figure may well be 13% higher on what the market believes the syndicates will actually write for 2020.
However, while the figures show that those poorly performing syndicates which fall within the “High Touch” category will write 6% more business next year Neal said the figure represented a reduction in real terms.
He explained with rates set to rise by between 8-10% and therefore the 6% figure saw a reduction in business.
He promised no let up in the market’s oversight of performance.
“We believe the plans that have been submitted are logical, realistic and achievable,” Mr Neal said. The challenge is the market successfully executing those plans in 2021.”
However, he believed the market had a “real springboard for change,” adding that companies in the market needed to ensure they did not get knocked off course should there be any bumps in the road.
“We have created the discipline; we are at the gain line and we cannot let anything detract us away from the need to maintain it.”
“It has been a tough journey to get here but it needed to be,” said Mr Neal. “We will keep a strong eye on performance management.
“We cannot be fooled into thinking that the task is complete. The focus on performance management will continue forever, it will remain an annual process.”