City snubs Lloyd's cash plea

LLOYD'S OF London is struggling to raise money in the City to backone of its key strategies to revive the historic insurance marketafter the devastating effect of 11 September.

Lloyd's wants to raise about pounds 60m to put far more of itsbusiness onto the internet, in order to lure more customers fromaround the world and to make the organisation more competitivecompared with insurance giants such as Swiss Re and AIG and the rivalmarket in Bermuda.

But many members of Lloyd's are against the plan and have refusedto fund it, forcing Lloyd's to approach other institutions in theCity.

One company, which is a member of Lloyd's, said: "They are havinga tough time and I am not aware that they have raised any money yet."

The project is called Blue Mountain and is being kept under wrapsuntil Lloyd's raises the money. Lloyd's aims to set up an electronicplatform which would allow underwriters to do a lot of work to policydocuments online, making the process quicker and allowing people inother countries to participate in the Lloyd's market more easily.

But critics believe the cost of the project is far too high,especially in a year when individuals and companies involved inLloyd's have had to pay out their largest ever claim from the USterrorist attacks.

One person close to the situation said: "It is obscene to bespending that much on a dot.com project now. The feeling is that thisis Lloyd's chief executive Nick Prettejohn's pet project and thatthere is no clear strategy on it."

Some syndicates are also unhappy with the plan because Lloyd's hassaid it expects the benefit to be felt in the years to come. But theLloyd's market is disbanded and re-formed annually, so thoseproviding capital now might not be involved when the internet projectbecomes profitable.

Lloyd's said it did not need as much as pounds 60m and insistedthat it was confident it would be able to raise funds in the City.

Lloyd's already has a website which details its syndicates andwhat type of cover they offer. It plans to make its internet presencemore interactive, so it can cut out much of the work which is stilldone on paper.

However, it has had to shelve a plan to enable customers to buyinsurance directly online after outrage from its specialist brokercommunity, who felt they were being sidelined.