September 2016
Lloyd’s chairman John Nelson has called on the UK government to look carefully at the extent of regulatory oversight as it looks for ways to maintain competitiveness in the wake of the impending Brexit.
Speaking at the annual Lloyd’s City Dinner last night (5 September) to an audience that included Mayor of London Sadiq Khan, Nelson said that Brexit presented “opportunities” by forcing a re-examination of the appropriate levels of regulatory intrusion.
“There is an opportunity for us to look at the regulatory framework objectively and ask ourselves: is it giving us every chance to succeed?”
Nelson went on to tell his audience that although a tough and prudential regulatory regime is necessary, “there is scope to ask ourselves whether some of the rest of the regulatory framework is overly burdensome”.
“The short answer is that it is,” he concluded.
Under Nelson’s watch Lloyd’s has at times clashed with the Prudential Regulation Authority (PRA), most recently over now-shelved plans for a market loss index.
The outgoing Lloyd’s chairman, who will step down in the first half of 2017, gave a speech that centred on the UK’s decision to leave the European Union (EU).
Nelson said that Lloyd’s is working with the government at every level to make the case for an outcome to the Brexit negotiations that will protect the interests of the insurance industry.
“But, as is sensible, we are continuing to explore all possible options,” he said.
Nelson noted that Lloyd’s has one of the most experienced teams in the world at acquiring and defending licenses to operate across the globe.
He also reiterated the point he made earlier on the Today programme that if Lloyd’s cannot access business via passporting or other cross-border methods, it will transact business onshore within the EU.
The City grandee went on to argue that business, and the City in particular, must learn the lessons of Brexit.
“There is, sadly, an underlying public cynicism directed at business,” he said. “Executive remuneration in big business is perhaps the most sobering example.
“Looking through the lens of members of the public, there is an utter incomprehension as to the size of senior remuneration packages – and this with no capital at risk.”
He said that to deal with this issue and the broader “trust deficit” with business, industry leaders must look to bridge the gap with the public.
“The City must show leadership here. By tempering its excesses, by growing its valuable contribution to the UK’s economy and by demonstrating to young people that the Square Mile is a place that their talent and potential is very much needed and valued, it can and must rebuild the trust that has slipped away over the last decade or more.”
