Business

Lloyd’s of London considers exit from landmark City building

Lloyd’s of London is exploring a move out of the landmark Richard Rogers-designed building that bears its name, in a stark sign of how the pandemic has prompted companies to reassess their need for offices.

The centuries-old specialist insurance market said it was “considering a range of options around our workspace strategy and the future leasing arrangements for Lloyd’s”.

That could mean leaving behind its headquarters in the City of London, which the market has occupied since it opened in 1986. Before Covid-19 struck, thousands of insurance underwriters and brokers would flood into the building’s famed underwriting room each week.

Lloyd’s is one of the City’s last face-to-face financial markets, with the underwriters sitting at desks called boxes and the brokers lining up to see them, waiting for their turn to discuss cover for everything from apartment blocks to space flights.

But since the pandemic hit, the brokers and underwriters have been forced to do business online, leading to questions over the future purpose of the building.

Lloyd’s has a lease on the office tower, which is owned by Chinese insurance group Ping An, until 2031, with a break clause in 2026.

Chief executive John Neal has in the past talked of reorganising the famous underwriting room — the centrepiece of the market — to make it into a less formal space.

Lloyd’s is now considering a more wholesale shift in its office space. “As we adapt to new structures and flexible ways of working, we are continuing to carefully think about the future requirements for the spaces and services our marketplace needs,” it said.

More detailed plans are being drawn up and could be shared later this year, it added.

Lloyd’s this month announced an overhaul of its IT systems which it said would “see the insurance marketplace transformed from a largely paper-based, analogue set of processes to one that is data-focused, automated, and cost-efficient”.

The news on the Lloyd’s building, first reported by property trade publication React, is the latest evidence of the impact of the pandemic on the office market.

Occupancy rates remain well below pre-pandemic levels in the UK. Even during periods when the government has guided that employees can return to work, they have barely passed 20 per cent, according to property consultant Remit Consulting.

Employers are now trying to gauge where working patterns might come to rest once the pandemic is over. Some are encouraging staff back whenever possible but others are looking to make permanent the more flexible work patterns that have developed during the pandemic, and moving offices to meet that need.


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