LONDON (Reuters) - Lloyd’s of London expects “sobering” results from a survey of the workplace culture at its member firms, the insurance market’s chairman said on Wednesday as a rise in investment income drove a four-fold profit rise.
In May the 330-year old market asked the Banking Standards Board to survey its 45,000 participants on issues such as honesty and respect following allegations of sexual harassment at member firms.
“The results ... will not be surprising but they will be sobering. They will provide a kind of benchmark for us, from which we have to measure consistent improvement,” Bruce Carnegie-Brown told Reuters by telephone.
Lloyd’s plans to publish the survey along with the actions it will be taking on Sept. 24.
In March, Lloyd’s introduced sanctions for poor behaviour including potential life bans on entering its City tower in response to the harassment reports.
Business at Lloyd’s is mainly conducted face-to-face, and the market has a reputation for day-time drinking in nearby City of London pubs. Lloyd’s this year stopped serving alcohol during the day at its in-house bar.
Lloyd’s, which covers commercial risks from oil rigs to footballers’ legs, suffered steep losses in 2017 and 2018 due to natural catastrophes such as hurricanes, typhoons and wildfires.
The market last year told its 99 member syndicates to ditch the worst performing 10% of their businesses.
“There are some green shoots from the impact of what we did,” Carnegie-Brown said, pointing to an average rise in premium rates of 3.9%, which he said was the first year of meaningful rate rises for several years.
Lloyd’s operating expense ratio dropped by 1.2 percentage points to 38.1%, but the cost of doing business at Lloyd’s remains higher than at rivals.
The market has proposed its members move to electronic exchanges next year, as it responds to that competition.
Further details of the strategic changes will be released on Sept. 30, Lloyd’s said.
Lloyd’s was ready for Brexit after setting up a European Union subsidiary in Brussels last year, Carnegie-Brown said, adding that it would like to see equivalence in reinsurance.
“The Brexit hub does not deal with reinsurance, which is why the equivalence piece is quite important.”
Equivalence is the main form of EU financial market access for non-member state countries. Brussels decides whether a foreign firm’s rules are aligned enough with those in the bloc.
Britain and Brussels have agreed in principle that it should form the basis of future EU financial market access.
Lloyd’s’ first-half pre-tax profit rose to 2.3 billion pounds from 0.6 billion a year earlier, boosted by investment income gains on strong bond and equity markets.
Lloyd’s also said that Annette Andrews its chief people officer would step down and confirmed David Sansom as its chief risk officer. Sansom had been in the role on an interim basis since October 2018.
“After five years, I have decided that, both professionally and personally, I am ready for a new challenge. I remain committed to Lloyd’s and to ensuring a smooth transition to my successor,” Andrews said in a statement.
Reporting by Carolyn Cohn, editing by Sinead Cruise and Alexander Smith