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Effort to change insurance market’s alcohol-soaked, testosterone-fueled culture appears imperiled

Lloyd’s of London, the world’s biggest insurance marketplace, is no longer a bastion of white, male privilege. Or so the white men running it say. A reputational crisis is putting the iconic British institution under pressure to prove it has changed.

“Lloyd’s is a huge, protective club,” said Inga Beale, its first and only female chief executive, who left in 2018.

A yearslong fight that she began to change Lloyd’s alcohol-soaked, testosterone-fueled culture now appears imperiled. Her successor faces allegations of misconduct related to an office relationship, even as he lectured others on the need for equality and diversity in the 60,000-person market.

“A lot has been tolerated for way too long,” Sandra Lewin, who left Lloyd’s as a portfolio manager in 2021 and now hosts an industry podcast, wrote on social media.

The alleged misconduct, previously reported by The Wall Street Journal, is reverberating worldwide. The influence of Lloyd’s reaches far beyond its steel-and-glass-sheathed London office, with it insuring everything from planes to cyberattacks in more than 200 countries. Lloyd’s alumni fill C-suites in the U.S. and beyond.

The uphill nature of Lloyd’s battle to stamp out sexism and racism reflects endemic issues in the wider insurance world, according to people close to Lloyd’s.

Efforts to level the playing field for women can fall afoul of the industry’s male-dominated mindset, where client relationships are forged on the golf course and child care is seen as a weakness, the people said.

Lloyd’s in a statement said its new leadership team is committed to building a culture that is inclusive, transparent, consistent and values-led.

The clubby Lloyd’s market connects thousands of buyers and sellers of risks daily, with deals struck in a cavernous underwriting room or the nearby bars, thronged by underwriters and brokers every lunchtime. Their conduct is overseen by the Lloyd’s Corporation, a self-described “regulator that acts to protect and maintain the market’s reputation.”

The corporation this summer bid farewell to John Neal, Beale’s successor as its chief executive, with a champagne toast. Central to the achievements of his six-year stint, according to his own LinkedIn post: “transforming the culture of our market.”

The self-congratulation went down badly with some of his audience, according to the people close to Lloyd’s. The gossipy, close-knit market had for years buzzed with rumors that Neal had unfairly promoted an employee, Rebekah Clement, with whom he was having an alleged affair, the people said.

Her meteoric rise in 2023 to the newly created role of director of corporate affairs, with a seat on Lloyd’s executive committee, sparked complaints to Lloyd’s then-chairman, Bruce Carnegie-Brown, according to the people close to Lloyd’s.

Neal and Clement didn’t respond to requests for comment.

The Lloyd’s council in 2023 commissioned an internal review of how Clement was appointed, which came up clean, one of the people close to Lloyd’s said. Neal and Clement both remained in their jobs until this year.

Lloyd’s new set of leaders decided in October to take a fresh look at Neal’s alleged behavior. After an initial review, Lloyd’s engaged a law firm to conduct a full investigation. The moves reflected a perception within Lloyd’s that the earlier review had failed to get to the bottom of the matter, some of the people close to Lloyd’s said.

A spokesman for Lloyd’s declined to comment on the substance of the investigation.

Word of the probe prompted American International Group to withdraw a lucrative job offer that would have made Neal one of its top executives, according to people familiar with the matter.

AIG is paying him $2.7 million under a “mutual agreement” that he forfeit a coveted role as its heir apparent, according to securities filings.

The furor ramps up the pressure to reform Lloyd’s, which has a centurieslong history of product innovation and marked cultural conservatism.

Lloyd’s has often been ahead of its time when it comes to its core role of insuring risks. Its underwriters were the first to cover a car—the 1904 policy described the newfangled vehicle as a “ship navigating on land”—an airplane and a satellite. It is famed for bespoke policies, from soccer star David Beckham’s legs to singer Celine Dion’s vocal cords.

But its tradition-steeped premises have often seemed detached from changes to the world outside. Lloyd’s banned women from its trading floor until 1973 and had no Black brokers until five years after that. It took until 1996 for a woman to head one of Lloyd’s syndicates, or groups of underwriters.

In 2020, Lloyd’s apologized for the market’s extensive historic links to slavery, dating back to its origins: Founder Edward Lloyd’s coffeehouse is cited in 1689 newspaper advertisements as the place to return captured freedom seekers, known as runaway slaves, according to the Lloyd’s website. The markets’ archives include a copy of a 1794 policy for a Spanish ship, insuring transported slaves as part of its cargo.

Beale said she was shocked by what she found when she assumed the chief executive role in 2014. “It hadn’t changed much since I worked there in the 1980s and 90s,” she said.

Women working for syndicates, which typically operate from a so-called box of desks, were still being referred to as “box bunnies” or “box bitches,” Beale said. “I thought: How can this be happening?”

Beale’s attempt to modernize Lloyd’s culture and technology provoked a “complete backlash right from the beginning,” including a stream of hostile emails and letters, she said.

Moves such as a ban on daytime drinking made press headlines. A male executive mocked her efforts to promote gender equality, asking if she was going to make them all learn to crochet, Beale recalled.

Part of the problem was the market’s strict adherence to ancient traditions. Lloyd’s to this day has liveried staff called waiters, a throwback to its 1688 beginnings in Edward Lloyd’s coffeehouse close to the River Thames.

The head waiter records losses of ships in a book with a quill pen and book, and rings the Lutine bell, salvaged from a vessel that sank in 1799, to mark major events, such as the death of Queen Elizabeth II.

An attempt to tweak Lloyd’s dress code in 2014, by allowing men in the market to work in shirt sleeves on a blazing hot day, provoked an instant revolt, Beale said.

“By 9:30 a.m. I had a revolution on my hands. The chair said, ‘What are you doing?’ Someone had complained I was allowing hoodies into the building. So by 10 a.m., the code was back on.” Several years later, the requirement for men wearing a tie on the underwriting floor was relaxed.

Soon after Neal took over the helm at Lloyd’s in 2018, he faced a media uproar. A Bloomberg News story in 2019 revealed pervasive mistreatment of women at Lloyd’s. In a survey later that year, 8% of the market participants who responded reported witnessing sexual harassment in the market in the previous 12 months.

He spearheaded action to polish the market’s tarnished image, including fines for managers who turned a blind eye to abuses and new codes of conduct. The moves had an effect, surveys and market participants suggest.

There have been “huge cultural and structural changes” since 2019, according to Sheila Cameron, chief executive of the Lloyd’s Market Association, a trade group. More than 40% of the Lloyd’s market workforce is now women, and 14% ethnically diverse, the latest data show.

But the investigation into Neal has reanimated the discussion about the treatment of women.

Cameron and others welcomed the new investigation but called on the regulator to reveal what it found. Lloyd’s normally keeps the results of such probes private.

“We look forward to seeing these results made public and concrete actions taken,” Cameron said.