LONDON (BestWire) - Insurance industry pioneer Maurice (Hank) Greenberg is throwing his support behind the leadership of the world's largest insurance market, saying he's confident it won't repeat the mistakes of the past.

Greenberg's vote of confidence comes amid recent criticism that capacity levels at Lloyd's are recklessly high in the current softening rate environment, and that management isn't doing enough to control the influx of capital.

But Greenberg, chairman and chief executive officer of C.V. Starr & Co., told BestWire Lloyd's chairman Peter Levene has an experienced team around him and has done a good job instilling discipline. "I don't think this is the Lloyd's of the past that concerns most of the insurance industry, that they'd be irresponsible that's not true at all."

An admitted, long-time admirer of Lloyd's, Greenberg announced his involvement in a second Lloyd's syndicate earlier this year: This one involves a team-up between Starr Managing Agents, a unit of C.V. Starr, and private equity company First Reserve Corp. to form Lloyd's Syndicate 2243, which will focus on energy risks.

Syndicate 1919 — another C.V. Starr creation — was formed in October 2006 and currently writes aviation, energy and marine coverages. The company also is participating in Lloyd's new China platform.

C.V. Starr is among the largest contingent of new underwriters to flock to Lloyd's in more than a decade. Competition has intensified, although many of the seasoned Lloyd's underwriters — disciplined, is how they describe themselves — are choosing to walk away from some types of business. The concern, though, is that some newcomers are driving rates even lower and overwhelming efforts to curtail capacity.

But on the other hand, some say, putting too tight of a lid on capital might drive some away from the London market to favoured destinations like Bermuda. Greenberg, the former head of American International Group Inc., said it isn't necessarily a bad thing if that happens. "If a syndicate is going to be irresponsible, you don't want them. Let them go some place else," he said.

The fact is, he added, there are always going to be irrational players in the insurance market. It's the nature of the beast.

"The insurance industry will always have some optimists that are more optimistic than they should be," he said. "They are more amateurish than they should be. You get new underwriters many times that come in and think they know more than the guy before them.

"It takes them a while to get the experience and the knocks that gently follow before they learn. That's not going to change," Greenberg said.

In addition to the latest venture at Lloyd's, Greenberg's C.V. Starr and Starr International Co. are making investments around the world, from real estate deals in Russia to a new reinsurance entity in Korea.

In the US, the entities are partaking in both private equity and direct investments, Greenberg said.

Last October, SICO acquired a Texas-domiciled shell insurance company. He said the acquired business, now known as Starr Indemnity & Liability Co., will assume some of the risk that the underwriting businesses are already writing.

SICO bought this business from Warren Buffett's Berkshire Hathaway Group. It was part of subsidiary Columbia Insurance Co.

Like the veteran Lloyd's player, Greenberg isn't planning to fatten this insurance company simply for the purposes of growing. There's no rush to make this into the next AIG.

"It'd be expanding into other classes of business slowly as we think the need exists and if the market is stable enough to do so. We're not going to write business for the sake of writing it; we'd only write it if we think we can achieve an underwriting profit," Greenberg said.