He will assume the position from 1 September and will replace Sandy Leitch who left the company at the end of 2011. His deputy chairman will be Norval Bryson who has worked as a non-executive director for Scottish Widows since 2005.

Lord Blackwell will also assume a non-executive director role from 1 June ahead of his position as chairman.

Lord Blackwell is the chairman of construction company Interserve, non-executive director of Ofcom and member of the board of the Centre for Policy Studies. Earlier this year he retired as non-executive director at Standard Life.

Carolyn Fairbairn has also assumed a non-executive director role at Scottish Widows from the same date.

Ms Fairbairn is a former non-executive director of the Financial Services Authority and was chair of the FSA’s risk committee from 2010-2011.

Sir Winfried Bischoff, chairman of Lloyds Banking Group, said: “Carolyn Fairbairn’s background in strategy, public policy and regulation complements that of Lord Blackwell in banking, consulting and insurance.

“Both bring experience in a number of important roles to the deliberations of our Board and my colleagues and I very much look forward to working with them.”