Valuing and protecting success

The year 2001, with all its horror, marked a watershed in the history of the Lloyd’s insurance market and led to the creation of the market’s Franchise. Rolf Tolle , Lloyd’s first Franchise Performance Director, recently explained in a speech to the Insurance Institute of London that the franchise encompasses duties for the franchisor as well as the franchisees. The Lloyd’s Franchise has dual obligations – to protect the market’s main asset, the Central Fund and to enhance Lloyd’s capabilities to trade professionally in an ever more commercial world. Mr Tolle referred to Lloyd’s strong performance framework, its diverse business flow, its broker hub, its financial strength rating, and the capital efficiency afforded by its mutual framework. However, after extolling Lloyd’s attractions as a market, Mr Tolle then touched on the issue of how a market such as Lloyd’s protects its position. He highlighted three factors: underwriting discipline, managing exposures and improving transaction processes to reduce costs and increased competitiveness. This is an edited extract of Mr Tolle’s recent address to the IIL.