Participants in the Lloyd’s of London insurance market have welcomed the appointment of Richard Ward as its new chief executive officer. He will start on April 24.
Ward replaces Nick Prettejohn, who left the market at the end of last year to become chief executive of life insurer Prudential‘s U.K. insurance operations. Luke Savage, director of finance and risk at Lloyd’s, has been the interim chief since Prettejohn’s departure.
Until Oct. 25, 2005, Ward was chief executive of the International Petroleum Exchange, an energy trading exchange in London. He stepped down to become vice-chairman and consultant to the exchange for a six-month period. The company changed its name to ICE Futures the day after Ward resigned from the chief executive post.
Ward has not worked in insurance before, but this has not stopped him getting a warm reception from several Lloyd’s players. “I’m delighted he has come from outside,” says Robert Hiscox, chairman of London insurer Hiscox, which owns Syndicate 33 at Lloyd’s. “We have been employing people from outside Lloyd’s for the past 20 years. The more people that come from outside, the better.”
Hiscox argues that those from outside the market bring a fresh perspective and do not have any of the preconceptions of those that have worked in Lloyd’s or run insurance businesses before. “I was terrified that we would get some boring insurance executive from a department of a big company who thinks Lloyd’s is an insurance company,” says Hiscox.
He believes that those familiar with running insurance firms would be frustrated by becoming chief executive at Lloyd’s because the job is to keep syndicates in check rather than sell insurance products. But Hiscox thinks that Ward will have none of these troubles because he is an industry outsider. “He knows exactly what he is coming to. This is very good indeed.”
Names – wealthy individual investors at Lloyd’s – have often stood up for tradition at Lloyd’s and opposed radical changes. But even they, it seems, are pleased with Ward’s appointment, despite the fact that he is an outsider with no previous experience of the market or insurance.
Anthony Young, chief executive of the Association of Lloyd’s Members, a Names trade group, thinks Ward could bring more balance to the governance structure at Lloyd’s.
“I don’t see why he shouldn’t come from outside the industry,” he says. “The members of the Lloyd’s Franchise Board are mostly from inside the insurance industry. The majority of the Council of Lloyd’s is made up of either capital providers or players in the industry.”
Young also agrees with Hiscox that someone with insurance experience may not have been a good choice. “Lloyd’s is a different kettle of fish from an insurance company,” he says. “If you have run a company like Aviva, for example, you will have experience of running an insurance company, but there are an awful lot of differences between an insurance company and Lloyd’s.”
One advantage that Ward could have over an insurance executive is that he has had experience of running a trading market, which is effectively what Lloyd’s is. And the fact that he implemented electronic trading at the International Petroleum Exchange could stand him in good stead. Lloyd’s is extremely keen on making itself more efficient, and has made numerous efforts to bring electronic trading to the market.
“He appears to have got an appropriate background of dealing with a marketplace and of doing several of the things that Lloyd’s might like to think about doing,” Young says.
