The backlash against a working-hours drinking ban at Lloyd's of London highlighted that the 330-year-old insurance market is living in a "bubble," according to outgoing Lloyd's CEO Inga Beale.
The reaction to the ban, which was revealed in February 2017, served as an example of the "embedded behaviors" at Lloyd's and the difficulty Beale faced in trying to instill change in a market with such a strong culture, she said Oct. 4 at a forum on financial services culture and conduct in London.
The first female CEO at Lloyd's, Beale will hand over to former QBE CEO John Neal on Oct. 15. She took over as CEO in January 2014 with a mandate to modernize the market.
The drinking ban applied only to staff of the Corporation of Lloyd's — the market's central governing body — rather than the underwriters and brokers who trade there and are known for doing deals over lunchtime drinks. But it sparked headlines such as the BBC's "Lloyd's of London angers staff with workday boozing ban."
Beale said she had viewed the ban as Lloyd's "catching up with a lot of professional businesses," pointing that many sectors clamped down on drinking during working hours "decades ago." But she added that the edict "unleashed the most extraordinary reaction. It was reported on right across the world."
The reaction outside the Lloyd's and London insurance markets ranged from mild criticism to surprise that alcohol was still allowed in working hours, Beale said, but people within the market were "extremely critical."
She said: "It made me realize what a bubble we are living in in our little market here, and how important it is to keep in touch with the rest of the world, because the world moves on." She added that she "didn't anticipate the backlash" and did not realize that she might have needed to use comparisons to what was happening elsewhere "to sell the reason."
Change is tough
Beale cited the drinking ban as an example of the challenges she faced in bringing broader change to a market with such a powerful identity. She introduced a number of initiatives to try to push a reluctant market away from paper and toward electronic trading and documentation, although Lloyd's eventually had to mandate the use of the London market's online placing platform, PPL, for its underwriters in March 2018 after slow take-up.
"I didn't quite understand the embedded behaviors that were there that make the culture so strong and how tough that would be [to change]," she said.
"Lloyd's still has this physical trading room where people are negotiating face to face so [the fact we are introducing technology] is having a really big impact on their day-to-day activity."