The City is not what it was. You hear the phrase repeated all the time and not just from the old guard, though it’s true, the lunches are no longer so long and bibulous, and not everything can be so easily attributed to expenses.
No, it’s as much to do with the physicality. Once-famous brass plates have gone, and in their place have come anonymous steel and glass towers. High-rise apartments too, virtually unheard of in the Square Mile.
Financial activity is as likely to occur in Canary Wharf or the West End as in the historic quarter. The once grand and mighty exchanges in equities and commodities have similarly disappeared and with them the concentration of specialist brokers and traders that gathered around.
Dress codes have loosened, a result of Covid and WFH. Today’s workers are as likely to be in trainers as in black, always black, polished, plain and laced “City shoes”. Ties and suits are a rarity.
There is though, one area that outwardly at least is little changed. This is Leadenhall, and Lloyd’s of London. The landmark, Richard Rogers “inside out” headquarters — now sufficiently dated and small to feel like a period piece alongside the recent crop of gleaming, giant structures — acts as a magnet. The pavement hums with folk who look discernibly like the City types of yesteryear. More women than there used to be, but grey two-pieces, even pinstripes, are in abundance.
Lloyd’s is the last great bastion of how things were
In the surrounding streets, insurers and their attendant advisers cluster and continue to ply their trade. The adjacent, splendidly evocative Leadenhall Market is little changed and its bars and restaurants are busy.
Lloyd’s, it is fair to say, is the last bastion of how things were. In more ways than one. It is about the only face-to-face market left standing, where underwriters and brokers meet in person, not remotely via Zoom or Teams, to strike their deals. Technology plays a part but nothing like the level that exists elsewhere (a long overdue update is heading towards completion).
The new chairman, Sir Charles Roxburgh, has made a point of asking younger underwriters about the importance of the floor and they all say how much they love being part of it, actually shaking hands and seeing a broker up close and talking to them, rather than communicating at a distance on email. Roxburgh, 65, a product of Stowe and a Cambridge classicist, smacks of a throwback, but he isn’t — he is ex-McKinsey [management consultants], where he was part of the team 30 years ago that planned the rescue of the 300-year-old institution then battered by the “Lloyd’s Names” scandal, before moving to the Treasury (second permanent secretary). His wife is Dame Karen Pierce, formerly our ambassador to the US and currently the UK special envoy to the Balkans.
He is impeccably connected at the highest levels, nationally and internationally. He needs to be, for the sake of Lloyd’s, the City and country.
Lloyd’s protects things few others do, such as no shows by pop stars and space satellites
Because Lloyd’s, for all its history and adherence to tradition, is one of the UK’s prevailing success stories. It has experienced turbulence but has survived and thrived. It holds less than 10 per cent of global insurance and reinsurance, and other competitor hubs, notably Bermuda and Dubai, are growing — and fast. Crucially, though, Lloyd’s is pre-eminent in protecting items that others will not countenance — no shows by stars at pop concerts, threats of cyber-attacks, crashing space satellites, collapsing oil rigs. Often, there is no reliable data and precedent to serve as guides, and to insure or not comes down to instinct and nerve. Don’t be fooled by appearances. Plenty is written about other aspects of finance, investment banking in particular and it is heavily dramatised and glamorised in shows and films such as Industry and The Wolf of Wall Street, but insurance accounts for a third of the City’s entire activity and most of that is centred on Lloyd’s.
We would be mortally wounded without it. A City that has suffered post-Brexit, that has lost out to New York on major IPOs and is presently witnessing a lack of takeovers, needs Lloyd’s like never before. It must be preserved.
That means the threat posed by those up-and-coming centres and from AI and algorithms has to be countered. The latter cannot replicate Lloyd’s centuries of know-how but they can develop models and produce quickfire analysis and solutions. Lloyd’s, as does the City, requires championing domestically and globally. The Government, which might recoil at some of Lloyd’s customs on ideological and political grounds, must promote it and do everything in its power to ensure its hegemony is protected and nurtured.
Critically, and there will be strident voices in the current Labour administration that will not like this — it means creating a regulatory environment that helps not hinders.
The “light touch” City regulation, that used to be so cherished and was responsible for creating and encouraging the rise of the world’s leading financial district, is anathema to several among today’s ministers, advisers, party members and watchdogs.
They must avoid temptation and back off. Yes, it may seem old-fashioned and counter to much else they are attempting to do, but they must.
It isn’t a question of enshrining a museum piece; it is about fostering a British powerhouse, one of the few we have left.
