The classic 1966 film A Man for all Seasons reveals the impossible task of the devout Sir Thomas More when he is ordered by Henry VIII to persuade the Pope to annul his marriage to Catherine of Aragon.
Despite being a loyal adviser to the King, More’s convictions and moral certainty prevent him from obeying him and he is eventually beheaded for treason.
In modern life, it is difficult to think of a role as challenging as advising a priapic absolute monarch on his religious duties. Nonetheless, the once-again vacant role of Lloyd’s CEO is one of the most demanding in British corporate life and arguably the most difficult it has been in twenty years. It is also one where standing up to powerful interests is essential to the role - and arguably Lloyd’s own future.
It is the most difficult in two decades because in that time Lloyd’s competitive edge has been slowly blunted by a combination of fierce overseas competition, a growing cost base and diminishing capital advantages.
And, at the same time, Lloyd’s most powerful stakeholders - its largest managing agents and the market’s biggest brokers - are restless, disunited and also arguably less dependent upon the Lloyd’s platform than they have ever been.
For example, Lloyd’s relies on Aon, Marsh and Willis for over 40 percent of its business but these brokers can find alternative pools of underwriting capital and expertise if they decide the cost of working with Lloyd’s is too demanding.
Meanwhile, most Lloyd’s managing agents themselves own non-Lloyd’s platforms where they can choose to write business if they also decide the downsides of doing so on Lime Street are prohibitive.
Indeed, Lloyd’s largest managing agent - XL Catlin with £1.48bn capacity - will soon be part of the giant Axa, an insurance powerhouse that has historically been sceptical of the Lloyd’s market. Will it echo Ace Group, one of the largest Lloyd’s insurers fifteen years ago but one that slowly migrated its business out of Lloyd’s?
Against this backdrop, Lloyd’s has just reported its worst results since 2001 and is struggling to bring down an eye-wateringly high expense ratio at 40 percent.
To put it into context, that means the average Lloyd’s customer knows that for every $1 of premium they give the market they can expect back only sixty cents of cover.
Lloyd’s chairman Bruce Carnegie-Brown - who came into the role last year - knows this is unsustainable. Since arriving he has sensibly been taking soundings from senior market figures and has made the decision that it would be helpful for a new CEO to take up the challenge of Lloyd’s reform.
But reform is difficult without unity of purpose and this means the difficult task of bringing together both sets of powerful barons - the managing agents and the brokers.
After all, does it make sense that while Lloyd’s ploughs ahead with its own electronic placement platform, PPL, the largest brokers are also themselves working on their own initiatives. In some cases - such as Willis Re and TigerRisk - they are even collaborating with competitors. How many digital platforms does the market need?
In other words, to succeed the Lloyd’s CEO requires both the diplomatic skills of Henry Kissinger to bring people together and the moral courage of More to stand up for what is right.
One of Inga Beale’s legacies over the past four years has been to put the issue of diversity at the heart of London’s insurance market.
The gender of her successor is irrelevant because the task is so tough that the right person be found as Lloyd’s must avoid the danger of slowly becoming marginalised.
Re-Insurance.com does not have a crystal ball to know the identity of this super(wo)man, nor have we seen the brief prepared for the headhunters.
But it would make sense that this person has the gravitas and experience of once leading an underwriting organisation so he or she can have the respect of the CEOs who lead the Lloyd’s insurers. They would then also be experienced in dealing with brokers and knowing how to negotiate with them.
Good luck to chairman Bruce Carnegie-Brown in finding the (wo)man for all seasons and persuading them to lead Lloyd’s through the choppy waters…