Lloyd's chairman Lord Levene said the market should focus on a more flexible capital structure and reduce the costs of doing business.
He was speaking about Lloyd's new three-year strategic plan, Building The Optimal Platform.
He also talked about the challenges faced by the industry as a whole after last year's hurricane season.
Leven said: “Two successive storm seasons have had a major impact on profitability, and exercising discipline is a must if we are to get back on track.
"2005 proves that insurance is still a cyclical business. Prices had been steadily falling during the first half of 2005, and while the hurricanes made a difference to pricing of some lines, we would be foolish to plan on that being anything other than brief respite.
"We cannot afford to go back to the boom and bust cycles which members have been subject to in the past.”
Levene also touched on the increasingly fragility of the reinsurance market, adding that reinsurance at an affordable price was becoming increasingly scarce – meaning that net underwriting increasingly equals gross for US windstorms.
“Katrina and her friends have simply upped the stakes. We cannot afford to be complacent and we know that in this environment, insurance centres which fail to make the grade will be increasingly marginalised on the world stage.”
