Lloyd’s chief of markets Patrick Tiernan has called for discipline as market conditions become more challenging and amid increasing examples of “egregious” trading behaviour.

“Moderating underwriting conditions typically manifest as slides, not ladders, and it’s pretty tricky to course-correct when halfway down and picking up speed,” he said in a final quarterly market message before becoming Lloyd’s CEO. “If we want a soft landing, plan from the top and be deliberate.”

Mr Tiernan says trailing data gives “cause for concern but not alarm”, but a barometer of sentiment is far more negative. 

“The risk of pre-emptive action is now dwarfed by the risk of acting too late. This is not a message for specific classes, a particular line or even a select few firms. It applies across the board.”

Mr Tiernan’s message to London market participants says Lloyd’s “will continue to apply heightened scrutiny because sustained profitability through the cycle is the foundation that supports every ambition we have. 

“We are currently using surgical tools, but if the market doesn’t self-diagnose, we will have to bring out the blunt instruments in short order. This will be a travesty given all you have achieved in the last five years.”

Chief underwriting officer Rachel Turk says that at a whole-account level, first-quarter risk-adjusted rates fell 3.3%, which was “below plan” but not terrible.

“However, one thing is crystal clear and that is that sentiment has shifted and is becoming more negative,” she said.

Mr Tiernan will take the top job from June 1, with John Neal stepping down.

See ANALYSIS.