Lloyd’s is drawing up a three-year plan on how it will deal with increasing foreign competition for its traditional markets.

Bermuda, in particular, is causing concern to Lloyd’s, with underwriters moving business to the Atlantic island to take advantage of new reinsurance operations which have no exposure to such disasters as the gulf state hurricanes.

Director of Worldwide Markets Julian James, who is being increasingly tipped as a possible successor to retiring CEO Nick Prettejohn, said last week that the plan will deliver “some very real and tangible benefits”.

In a speech in Brighton that was remarkable for its blunt appraisal of the market’s problems and the need for technology-driven solutions, he said Lloyd’s needs to change its capital flexibility, reduce the costs of doing business and devise better business processing standards.

“I can give you a flavour [of the three-year plan],” he said. “Mutuality at an affordable price. A capital-setting process and a performance management framework which is tailored for each franchisee. An improved distribution network with lower acquisition costs. More efficient business processes which are comparable with other platforms.

“The stakes are high,” he said. “This is a crucial period for Lloyd’s.”