Britain’s world-famous insurance market Lloyd’s of London is set to launch a review into the future of its iconic trading floor that could see it drastically scaled back.
Bruce Carnegie-Brown, chairman of the 334-year-old City institution, said Lloyd’s ‘started as a coffee shop and it might end up looking more like a coffee shop again’.
The shake-up comes as huge changes sweep through the City, triggered by the Covid pandemic. Banks, insurers and asset managers including Schroders and Standard Chartered are planning to allow staff to work from home more often.
Iconic: The vast underwriting floor of the Richard Rogers-designed Lloyd’s of London building in Lime Street
The competitiveness of Lloyd’s, the oldest insurance market in the world where nearly 50,000 employees draw up lucrative insurance contracts, is seen as crucial to the City’s status as a leading financial centre.
It is one of the last remaining face-to-face financial markets globally and a major draw to City firms as uncertainty over Brexit has led financial companies to move billions of pounds of assets and shift staff to the Continent.
At the heart of Lloyd’s is its gigantic trading floor where brokers meet underwriters to thrash out insurance deals for customers worldwide. But Carnegie-Brown said a consultation scheduled for next year could see the grand underwriting room making way for a smaller area where some meet in person while others appear digitally on screens.
No decisions have been made, but the move could potentially do away with the underwriting desks where insurance policies are negotiated and would allow more companies to have a base at Lloyd’s.
Carnegie-Brown told the MoS: ‘The need for underwriting desks may be less important than just creating the right environment for people to meet and discuss different kinds of insurance risks. In a mixed environment, some people will be in the room having that conversation and some people will be on the wall connected digitally.’
Carnegie-Brown said the consultation will be ‘focused on the building itself and on the trading floor’.
He said: ‘The question would be, as you think about the future of Lloyd’s and the digitalisation of the marketplace… what physical services do you think you’ll need going into the future? And how should Lloyd’s respond to that?’
He stressed that Lloyd’s needs to update for modern working patterns and said the extra space created by shrinking the trading floor could actually make it more attractive to underwriters and brokers.
‘At the moment, a lot of underwriters have space in the building, but also have buildings elsewhere around the City,’ he said. ‘That is quite expensive as an investment.
BACK TO THE 17TH CENTURY FOR CITY GIANT
The world’s oldest insurance marketplace traces its roots back to Edward Lloyd’s coffee house in Tower Street in the 1680s.
His cafe became a meeting place for merchants and began specialising in shipping insurance globally.
Today, Lloyd’s of London is a global powerhouse based in an iconic modern building, designed by Richard Rogers, in Lime Street.
The grand building houses the Lutine Bell, recovered from a ship carrying gold and silver insured by Lloyd’s, which sank in 1799.
Lloyd’s provides traditional insurance as well as specialist cover. It reportedly insured the hands of Rolling Stones guitarist Keith Richards for $1.6million (£1.2million).
‘To the extent that our physical footprint on the floor might shrink, there will be space in the building, for instance, for them to take on a permanent basis – not to need to have big office environments around, particularly if they’re moving to more flexible ways of working.’
Lloyd’s was forced to close its grand underwriting room for the first time in its history because of Covid. Lockdown restrictions meant brokers and underwriters had to make complicated insurance deals over the phone and online. There was a reopening after five months with strict measures in place, including glass screens. Lloyd’s created a ‘virtual room’ to allow some brokers and underwriters to meet in person, while others joined in digitally.
Earlier this month, Lloyd’s revealed plans to save about £800million within two years by moving more processes online. Carnegie-Brown added: ‘While the market converted to remote working really well… what you’ve got to recognise is that some are uncomfortable about coming into the physical marketplace.’