Lloyd's of London Tightens Rules on Alcohol and Misconduct

Lloyd's of London, the renowned insurance market, is implementing stricter measures to address unprofessional behavior, particularly focusing on alcohol-related misconduct and bullying. This initiative is part of the organization's ongoing efforts to transform its reputation and align with modern professional standards.

Founded in 1688, Lloyd's has a rich history spanning 336 years. The market, known for its iconic building designed by Richard Rogers, has played a significant role in marine insurance and has been involved in notable events such as insuring the Titanic. However, its reputation has been marred by allegations of misconduct and outdated practices.

In a proposed set of changes, Lloyd's suggests prohibiting business activities when "under the influence of alcohol where it leads to unprofessional behaviour." This measure is expected to affect the entire London insurance market, not just Lloyd's employees, who have been banned from daytime drinking since 2017.

The organization is also addressing other forms of misconduct, including illegal drug use, harassment, and bullying. Lloyd's emphasizes that such behavior is "inherently unacceptable" regardless of whether tangible harm to the market can be demonstrated. This approach aligns more closely with the Financial Conduct Authority (FCA) standards, extending the definition of misconduct to include inappropriate behavior outside of work hours when in the presence of other market participants.

These new measures come in the wake of sexual harassment claims that surfaced in 2019, which prompted Lloyd's to implement a series of reforms. These included lifetime bans for severe offenses and converting the on-site pub into a coffee shop. Despite these efforts, challenges persist in changing the industry's culture.

"I feared its toxic culture would not change in my lifetime."

In 2022, Lloyd's issued a record fine to an underwriting group for bullying and sexual harassment during an annual event, demonstrating its commitment to addressing misconduct. However, the organization maintains that it "will not seek to become more directly interventionist" in its approach to regulation.

Lloyd's unique structure, with its syndicates and Names, has contributed to its ability to underwrite complex, specialist risks that other insurers avoid. This has included developing cyber insurance and insuring unusual items like celebrity body parts. As the market continues to modernize its operations, it faces the dual challenge of maintaining its distinctive role in the insurance world while adapting to contemporary professional standards.

The proposed changes are currently under consultation, reflecting Lloyd's' ongoing commitment to evolving its practices and culture. As the organization approaches its 340th anniversary, it strives to balance its storied history with the demands of a modern, inclusive workplace.