A spate of natural disasters pushed Lloyd’s of London into an annual loss for the second year in a row, as it vowed to address reports of sexual harassment.
The 331-year-old insurance market made a pre-tax loss of £1bn for 2018, following a loss of £2bn in 2017, which was its first loss in six years.
Lloyd’s paid out £19.7bn in claims last year when a number of severe natural catastrophes devastated homes and businesses around the world, including hurricanes Florence and Michael, Typhoon Jebi in Japan, as well as the Californian wildfires.
However, after years of falling prices, renewal rates on insurance policies have picked up, rising 3.2%. Lloyd’s has also removed £3bn of underperforming business from the market and is cutting costs.
The results come a day after Lloyd’s pledged to take a zero-tolerance approach to tackle claims of sexual harassment. In a report by Bloomberg, one industry insider labelled Lloyd’s a “meat market”. The shadow City minister, John Reynolds, described the market’s culture as “institutionally sexist”.
Speaking on Wednesday when the results were announced, Lloyd’s chairman, Bruce Carnegie-Brown, a former JP Morgan banker, said he had witnessed “sporadic incidents” of sexual harassment over the years. He said the latest allegations showed “this is probably more widespread than we fully understand. It is distressing that women in 2019 should be suffering harassment in the workplace. It is not acceptable”.
In response to the allegations, Lloyd’s has threatened potential lifetime bans for anyone found guilty of “inappropriate behaviour”, on top of sanctions imposed by the company that employs that individual.
If companies are found not to be doing enough, Lloyd’s can sanction them by issuing fines or withdrawing their right to trade in the market, Carnegie-Brown said.
Lloyd’s will set up an independently run hotline, where inappropriate behaviour can be reported, and it has appointed two women to its nominations board.
The firm said it was “Brexit-ready”, with its new Brussels subsidiary writing all European policies since January. The group, which began in 1688 as Edward Lloyd’s coffee house, where merchants and agents met to arrange shipping insurance, is made up of 99 syndicates that provide insurance cover for anything from businesses to footballers’ legs.
Inga Beale, an industry veteran who became the insurance market’s first female chief executive in January 2014, left last October. Named the world’s most powerful LGBT executive in 2015, she pushed for greater diversity and banned daytime drinking for Lloyd’s employees. She also sought to modernise the market, where business is traditionally conducted face to face, and 40% is now done electronically.
There is no market-wide drinking ban but Carnegie-Brown said Lloyd’s would take action against anyone found under the influence of alcohol and could ban them from the market. One Under Lime, the pub in the undercroft of the Lloyd’s building, is to be converted into a coffee house.
Women were not allowed into the Lloyd’s underwriting room until 1973, when Liliana Archibald became the first female broker there.