'Capacity will depend on cycle' says Lloyd's Tolle

Changes to capacity at Lloyd’s will largely depend on how much the market hardens, performance franchiser director Rolph Tolle said.

Tolle said the Lloyd's market would not be announcing it's capacity changes, as it was a 'hypothetical figure'.

Tolle, speaking to a large audience in the Lloyd’s Old Library, said: “Ultimately, we all have to determine the overall capacity that is appropriate for where we are in the cycle. This is our conundrum.

“So far we are winning the game, but it is a while before we can truly pat ourselves on the back and call ourselves winners.”

In 2007 capacity was £16.1bn, but then dropped slightly for 2008 to £15.9bn.

Tolle said he did not expect to see insurance rate increases rise as strongly at the reinsurance renewals.

“We are in a situation where rates are moving but it is a slow burner, but we will see things change as the year progresses,” he said.

Tolle said insurers had a duty to educate shareholders to explain why they may not be increasing capacity, especially in hardening market.

He said it was a testament to the strength of the Lloyd’s market that it was being viewed as a ‘safe haven’ despite the economic turmoil.

“The fact that we have been labelled a safe haven in a year of economic turmoil is an incredible compliment to what we have all achieved. But as I have said before, we can never afford to be complacent.”