Lloyds Bank. Picture: BLOOMBERG/JASON ALDEN
Lloyds Bank. Picture: BLOOMBERG/JASON ALDEN

One of the last bastions of face-to-face trading in the City of London has raised the hackles of its staff by banning alcohol during working hours. Lloyd’s of London, the insurance market, has issued new guidance to its 800 employees that includes a 9-5 prohibition on drinking alcohol. The ban only applies to Lloyd’s staff, rather than the insurance brokers and underwriters who do business in the 329-year-old market.

Lloyd’s said that the move, introduced as part of a regular update to staff rules, is designed to bring the institution in line with others in the industry, rather than being due to an increase in alcohol-related incidents.

Many staff at Lloyd’s, which include accountants, lawyers, IT specialists and regulatory experts, are angry about the ban, describing it as heavy handed. If a member of staff were to be caught drinking, the issue would first be taken up with their manager. It could eventually, after a disciplinary procedure, lead to dismissal.

London’s insurance market — which specialises in covering complex risks ranging from injury to sports stars to cyber attacks on companies — thrives on the face-to-face contact between brokers and underwriters. For many, this has traditionally meant building relationships at the pubs and restaurants in and around Leadenhall Market, located next to Lloyd’s.

Market insiders say that, despite a general trend away from lunchtime drinking elsewhere in the city, it is still popular in the insurance world. "It still goes on more than you might expect. There is still a ‘short hours and long lunch’ culture in some places and there are stories of brokers sitting in pubs handing out contracts like Jabba the Hutt," said one person close to the insurance market.

Over the past 20 years, however, there have been moves across the market to crack down on the drinking culture. Some insurers, such as Hiscox, have a policy that staff are expected not to drink during the working day. QBE also has guidance advising staff not to drink, but it has stopped short of an outright ban.

The move comes at a sensitive time for the London market. Profits across the industry are under pressure because of falling insurance premiums and low interest rates. Many insurers have earmarked London as an expensive place to do business and are looking to cut costs.

Brexit adds an extra layer of uncertainty as the loss of passporting rights will force some London-based businesses to set up new subsidiaries in other parts of the EU. Lloyd’s itself is due to make a decision on its post-Brexit structure in the coming weeks, and is likely to pick a new EU base in one of the Benelux countries.

© The Financial Times Limited 2017

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