Lloyd’s turning threat into opportunity

Ms Beale's comments came after publication of the report, 'Why London Matters', commissioned from the Boston Consultancy Group by the London Market Group. It found that while the London insurance market is, by some margin, at the top of its game now, it is also under a competitive threat. It said that the London insurance market is not responding quickly enough to opportunities in the high growth economies. Only half a percent of the absolute growth over the last couple of years in emerging market premiums was placed in London. And the London share of the Asian insurance market is a mere 2%. "The key learning for us is that we are not making enough headway in the markets which are growing fastest - mainly those in Asia, Africa and Latin America," she said. The market is at a crossroads with two very clear choices, according to Ms Beale. "You can define your competition in a comfortable way as the guy on the next box, offering a cheaper price. You know him or her pretty well. And maybe you could decide to offer a price that's a bit cheaper. There's no need to think about China, or Brazil. They may be growing at 15% and 9%. But they're still relatively small markets. And what's 15% growth of something small? Almost nothing," she said.hideGet up and go But there is another option, she explained: "You can get out to the fastest growing markets and attract new business from there. You can talk to the brokers that you know so well about developing new forms of cover which your clients need, but can't buy at the moment. You can face up to the fact that the guy on the next box who is undercutting your price right now may be the short term problem - but the real issue to consider is in Asia, in Brazil, young insurers are flooding out of the business schools, keen to make sure that all that new business comes to them." But, she said, some won't see it that way. "And in 10-20 years' time, when China and Brazil are in the top five global markets in the world, you won't know those cedants. And they won't know you. They will probably have found a way to write the tricky specialist business locally. You'll be left fighting the guy on the box next door for Florida windstorm and Australian liability cover." She said that despite this scary view, there would be those who see opportunity: "In fact, I think you will be the architects of the latest incarnation of the Lloyd's market. The one which is designed to service a truly global economy, to work with markets which have little knowledge of specialist cover and partner up with cedants to find the products that work for them. Because the flip side of the LMG report is that there is opportunity. Clear opportunity "There is a vast, practically untapped, market for the kind of difficult, specialised cover that we currently write," she said. "This is a clear opportunity for London - although it could also become a threat, as new insurance hubs emerge across the world." Lloyd's is responding and its Vision 2025 strategy, set out by the Council of Lloyd's, emphasises growth, expansion and innovation. Lloyd's is looking to expand geographically, getting closer to markets around the world. Last year it received a licence in Beijing, approval for an office in Dubai, a new life licence in Poland, a direct MAT licence in Colombia, and the go ahead to open a representative office in Mexico. Lloyd's also approved 107 new coverholders and two in countries for the first time - Lithuania and Mexico - and helped to set up consortia in China, France and Singapore.

Lloyd’s turning threat into opportunity

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