Lloyd’s CEO John Neal has said he expects to sign off on business plans allowing the market to grow by between 12% and 13% in 2021 and write up to $15bn of new business.

The CEO was speaking as part of Aon’s fireside chat series of interviews with top (re)insurance executives.

Neal also said he was confident the market would perform within expectations in 2021, and there was scope for growing both exposure and pricing.

The overall growth forecast is an upwards revision of a recent prediction Neal made of high-single-digit growth next year, though the new business forecast is at the low end of a £12bn-£13bn ($15.5bn-$16.8bn) range he previously cited. The comments come as the business planning process continues between Lloyd’s and syndicates.

Lloyd’s gross written premium in 2019 was £35.9bn.

Neal added that the Covid-19 pandemic had enhanced the importance of Lloyd’s physical presence.

“I think the physical location has perversely become more important, not because we can’t trade without it, but because that ability to connect in certain circumstances and certain instances is critical,” he explained

“And as real estate footprints reduce in the major cities, I think having a legitimate location where people can meet for the purposes of doing insurance has just gone up actually.”

The Lloyd’s leader noted that the insurance industry had got off to a “slow start” at the beginning of the pandemic and found itself on the back foot in the media.

“We found ourselves in a similar position I think the banks did in the financial crisis, people feeling disappointed or frustrated that either there wasn’t cover in force or that they thought there might have been cover but the cover wasn’t there,” he said.

He commented that the pandemic experience had proved a “wake up call” for insurers to consider protecting intangible assets on companies’ balance sheets.

Quizzed on broker consolidation, Neal said he thought Aon and Willis Towers Watson would flourish following their merger and improve the broking market.

“I think it will lift the standards and that must be net net good,” Neal said.

Around a third of 2021 business plans being submitted to Lloyd’s at this stage in the planning season are unrealistic in terms of growth or profitability expectations, CEO John Neal has said.

Speaking at a press conference after Lloyd’s H1 results today, the executive said no business plans had yet been approved at this point in the year, with the first of four “waves” of plans now being assessed.

An early assessment shows there is still a misalignment of expectations between Lloyd’s and some syndicates.

There is a percentage of plans Lloyd’s feels comfortable with, and a further proportion where “we feel we will get to where we want to be in terms of premium expectation or performance”, Neal said.

These two cohorts and the light-touch syndicates – which get automatic plan approval – account for around two-thirds of the market, the CEO continued.

“About a third of the market we would say we don’t see a clear path yet to plans which are logical, realistic and achievable,” Neal said.

“I am not discouraged by that, it’s where we would hope to be, but there’s lots of conversations to be had.”

The CEO said Lloyd’s would grow in the “high single digits” for next year, with around £12bn-£13bn ($15.6bn-$16.7bn) of new business set to be approved and new syndicates set to join the platform.

“Two years ago we were talking about £7bn of new business,” Neal added.

“I think we are getting the balance right for giving the flexibility for business growth… I think that is pretty significant growth for 2021.”

The CEO’s comments came after a set of Lloyd’s H1 results which were battered by £2.4bn of Covid-19 claims but showed significant improvement in the underlying underwriting performance of the market, with the attritional loss ratio declining 7.1 percentage points year on year to 52.6%.

That improvement was mainly driven by the past three years of remediation efforts, Neal said, without giving further detail. Improving rates gave a further tailwind, while Lloyd’s also booked a small amount of benefit from reduced loss frequency from certain lines as a result of Covid-19.

The CEO added: “We are near to where we would hope to be on an underlying basis. We expect to see further improvement through 2021 as the market works on delivering plans which are logical, realistic and achievable.”

Lloyd’s has announced a target of 35% female representation in leadership positions as it seeks to fulfil its commitment to driving long-term culture change in the market.

The 35% target applies to the Lloyd’s market, and within that to company boards, executive committees and direct reports to the executive committee. It is expected to be achieved by 31 December 2023.  

In addition, boards and executive committees combined will be expected to achieve at least 20% female representation by the end of 2023. All new market entrants will be expected to meet these targets on arrival. 

Lloyd’s said it would also set a target for market ethnicity in Q2 2021, following extensive collection of ethnicity data in the market to determine a starting point.  

Lloyd’s today additionally published its culture dashboard, which provides a snapshot of the demographic make-up of the market, informed by the Lloyd’s culture survey last year as well as market participant data across key demographic characteristics.

The dashboard was one of five action points Lloyd’s announced in March last year following a Bloomberg article that reported instances of sexual harassment in the Lloyd’s market, citing anonymous female sources.

The dashboard shows that women currently hold 29% of leadership roles as defined above.  

However, there are still 12 firms with all-male boards and 12 with all-male executive committees.  

Out of this group, seven firms have all-male board and executive committee teams combined. One firm has all-male direct reports of the executive committee. 

Within the Lloyd’s Corporation, women fill 47% of leadership roles.

“The market [female representation] target will drive an improvement in the gender balance in leadership roles across the market in the short-term, with Lloyd’s committing to a medium-term ambition for parity over the next decade,” Lloyd’s said.

Other findings from the culture dashboard include that 88% of the market identifies as heterosexual, with 2% as lesbian or gay and 1% as bisexual. Around 8% preferred not to say.

Meanwhile, just 4% of the market have a disability, while 91% are able-bodied and 5% preferred not to say.

Lloyd’s CEO John Neal said: “Last year, we committed to building a much more inclusive market – one that we are all deeply proud to be part of, and one that welcomes and represents the diversity of our customers globally. In the Corporation, we have achieved parity in less than two years and we are all the better for it.

“While we have put in place a series of actions to accelerate change, it is abundantly clear that we have much work to do and we must be impatient in our resolve to get there. The Corporation will continue to do more in leading the market on all aspects of inclusion.”