Lloyd’s faces becoming irrelevant unless it grabs “a once in a generation opportunity” to overhaul its model for the digital age, CEO John Neal says.

“Our survival hasn’t yet been threatened in the way it has been in some other industries, such as retail,” he told a conference in London yesterday.

“As a sector, our choice is to continue with business as usual and become irrelevant or change and realise an enormous opportunity in the world of risk.

“We need to reset the way in which insurance and reinsurance is transacted globally. We can do that by leveraging and seizing the spirit of innovation that’s always been at the centre of the market and the trusted partnership and relationship between the customer, broker and insurer.”

The former QBE Group CEO, who took charge last October, has placed innovation at the heart of his modernisation plans for the venerable market, something that was also a priority for his predecessor Inga Beale.

Last month the business opened up a global consultation process on its Future at Lloyd’s document, which outlines six ways the market can respond to its challenges.

One proposal that has attracted attention is the concept of a Lloyd’s Risk Exchange to handle the placement of less complex risks more efficiently and cost-effectively.

Mr Neal says the market needs to shore up its competitiveness. Customers are getting back, at best, a value of just $US60 ($87) for every $US100 ($145) they pay for doing business with Lloyd’s.

“I can’t think of an industry outside of our own where that would be tolerated,” he said.

"We’re facing quite challenging headwinds. Our products simply aren’t keeping up with the changing landscape of risk and we’re not harnessing all of the new capital that’s knocking on the door.”

He says the market has evolved and adapted throughout its history, and it can do so again by harnessing the spirit of innovation.

“Lloyd’s has always been a platform, a marketplace where brokers, underwriters and capital have come together to create and exchange value by exchanging risk, ultimately for the benefit of our customers,” Mr Neal said.

“The building blocks are in place. Now we have the challenge of unlocking and evolving a 330-year-old platform.”