How has Lloyds of London responded in its own investments?
Lloyd’s of London has become extremely conservative. We have $90 billion in assets and only 5 percent is invested in equities. It’s boring – and boring is good. How is the recession affecting Lloyd’s? The property and casualty insurance industry has benefited compared to most because it is a nondiscretionary purchase. Will we feel anything from the recession? Yes, but it shouldn’t be as bad as other industries. What changes have you made to Lloyd’s since you became chairman in 2002? There’s this thing called the insurance cycle, and every few years companies lose a tremendous amount of money. So I said, if you know these losses are coming, what can you do to mitigate the situation? One of the things we do is review every Lloyd’s members’ business plan every three months. It’s almost a continuous review. How will you know if it works? We’ll know it works if everybody is losing a fortune and if in that year we made a very small profit, or a very small loss. Some years, you have storms fo
