Things are looking up for Lloyd’s, says CEO Nick Prettejohn. Speaking at the Royal Institute of International Affairs in London last week, he said the performance of the group over the past few months shows the group clearly has something going for it.

“In the early 1990s and in the aftermath of the tragedy of September 11, last year, there were those who confidently predicted Lloyd’s demise,” Mr Prettejohn said. “Instead Lloyd’s is very much alive and kicking at a time when the industry as a whole has a number of problems.”

Lloyd’s has already paid around $2.5 billion of September 11 claims, after lodging $5 billion in trust funds in the US to fund its gross liabilities relating to September 11. He said that with only 5% of the market’s assets in equities, its balance sheet is not exposed to falling equity values in the same way as the rest of the industry.

Mr Prettejohn said the group’s commitment to and unprecedented ability to work with brokers to produce solutions to client problems, along with access to underwriting decision-makers, is the real clincher for the market. Comparing Lloyd’s performances to a football game, he said it has been a game of two halves over the past 10 years. “Our best businesses have generated world class performance and our worst businesses have generated substantial losses that have cancelled out the good performance.

“Such bipolarity is not sustainable,” he said. “The cost of the mutual element of our financial structure, which is increased by poor performance of the few, must be kept to a level which is competitive for many.”

But it’s not going to be all plain sailing for Lloyd’s. One of its largest investors, Ace, has announced it will cut its underwriting in the market by more than a third next year. CEO Brian Deperreault said while Ace is leaving the Lloyd’s market, it won’t be getting out of the London market altogether.