So, what happens now? Some say the reinsurance cushion will encourage more investment in Lloyd's, but Wendy Baker, president of Lloyd's America, doesn't expect any short-term impact.

At an elegant press dinner on Monday night attended by reporters from BusinessWeek, Forbes, The Wall Street Journal, Bloomberg, Reuters and yours truly, Ms. Baker noted that Lloyd's hasn't exactly had a hard time attracting capital lately–and that, in fact, some capital had been turned away in the market's quest to write coverage responsibly. If rates continue to slide the way they've been falling this year, she said Lloyd's would certainly not be opening any capital floodgates.

“We're on target for a very strong year,” she said–hastening to add, however, that “the year is far from over.” Last year, she recalled, Lloyd's at first expected to cut back on capacity, but after Hurricane Katrina hit–driving up property rates–the market ended up increasing capacity by 9 percent. That's how a sound insurance market should work.

The arrangement with Berkshire's National Indemnity is far from a done deal, with regulatory approval pending. However, one can sense that Lloyd's has already turned the corner, and is ready to focus more vigorously on what Ms. Baker sees as the market's biggest challenge–giving up its paperwork-intensive culture and leveraging the cost savings technology could provide.

They certainly have the right person in place as CEO to accomplish this, as Richard Ward–who came aboard in late April–has an electronic background in the energy futures market. Mr. Ward–who I referred to as “The Mystery Man” in a June 19 NU column because he hadn't made himself available for any press interviews about his intentions for Lloyd's–finally made his public speaking debut last month at the Chartered Insurance Institute conference. (He has yet to agree to any one-on-ones with the media.)

Mr. Ward, in his speech, noted that Lloyd's has plenty of room for improvement, given the fact that the market generates four tons of paper every day, “enough to fill two jumbo jets every year.” But he doesn't expect one huge change, instead promising “bite-size solutions that address specific problems and combine to have maximum impact…”

He also made it clear that he does not envision Lloyd's itself becoming an electronic market, preferring to preserve its classic face-to-face business model, stating that he sees Lloyd's retaining a real, rather than a virtual trading floor “for the foreseeable future,” while insisting that Lloyd's must “be supported by efficient business processes.”

Where do you see Lloyd's going? Have any suggestions on how the market can improve its operations? Feel free to weigh in below.