Lloyd’s of London’s director of finance has admitted to Financial Director in an exclusive interview that an historic lack of transparency in its accounting methods hurt the iconic insurance market’s ability to attract entrants to its market.
Luke Savage says that Lloyd’s had carried a culture of secrecy and admits that the resulting lax approach to accounting transparency put potential new entrants to the market off, because it fostered a lack of trust.
“If you go back a few years, Lloyd’s used to be very secretive about its affairs,” Savage tells Financial Director. “We ran on a three-year accounting concept, whereby no one outside Lloyd’s understood what our numbers meant. We have got better at recognising the value of financial transparency.
“If you want people to trust you and give you their business, they have to be able to understand what they are putting their trust in.”
Savage, who has been with Lloyd’s for six years and is also director of risk management and operations, argues that in addressing the issue the finance function has played a leading role in the revival of the market’s fortunes, announcing first-half pre-tax profits of £628m this September.
“We have queue of people that want to join [our market]. When I joined Lloyd’s there wasn’t anybody clamouring to come into the market,” Savage says.
Our full interview with Luke Savage will be published in the December 2010 issue of Financial Director and at http://www.financialdirector.co.uk/features-interviews
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