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EAIC Today Day Three 2016

FRIDAY News 14.10.16 Weak economy triggers creditclaims but Lloyd’s Asia boss remains bullish on potential (Continued from page 1) with the good economic growth forecasts and increased awareness of insurance and the growth of the middle class, means there remain significant business opportunities for growth. Singapore is a successful underwriting hub for Lloyd’s in Asia, with more than 200 underwriters representing 23 syndicates (22 service companies). Premium income has tripled since 2009 to reach $680 million in 2015, with a combined ratio of 93.6 percent last year. Four new syndicates (Antares, Aspen, Brit and Standard) have joined the Lloyd’s Singapore platform in the last 12 months. Lloyd’s Asia offers local underwriting authority in 47 classes of business—property, marine, energy, cargo, and terrorism are Lloyd’s largest lines. Chaplin said that while Lloyd’s is well placed in the region from a licence perspective, he also warned that regulatory protectionism is on the rise and that the regulatory burden and cost of doing business have been increasing. As part of Lloyd’s International Vision 2025 strategy, Malaysia and India were two countries identified as having opportunities for growth for the Lloyd’s market. In India, the government has taken steps to further liberalise its insurance market and this year passed regulations to allow Lloyd’s to establish its market structure in India. “This will enable Lloyd’s managing agents to set up service companies in India and access Indian reinsurance business. Lloyd’s has submitted an application for an onshore reinsurance licence and we hope to receive approval shortly. Following receipt of our approval, we will be working with our managing agents to establish their presence locally,” Chaplin said. In Malaysia, Lloyd’s has applied for a tier 1 onshore reinsurance licence this year which will enable Lloyd’s to contribute greater capacity and specialist underwriting expertise in emerging and complex risks to serve the growing demands of the domestic insurance sector. “Lloyd’s sees the potential for Malaysia to develop as a commercial re/takaful hub and construction insurance market, especially driven by infrastructure projects resulting from the country’s Economic Transformation Project initiatives,” he said. “Lloyd’s unique market structure makes Shariah compliance possible.” Lloyd’s currently serves the Malaysian market as a tier 2 reinsurer through its nine “Lloyd’s onshore presence will help to protect Malaysia’s economic growth.” Labuan Service Companies and as a cross-border reinsurer primarily from London and Singapore. “Lloyd’s onshore presence will help to protect Malaysia’s economic growth by supporting the expansion of insurance penetration and, in so doing, limit the economic impacts of catastrophes and other major events that can otherwise result in substantial costs for the state and the taxpayer,” said Chaplin. Long-term vision Regarding Lloyd’s future in the Asian market, Chaplin says its approach is multifaceted. “Lloyd’s has a long history of paying every valid claim, but we see our role as larger in identifying new and emerging risks, quantifying these and providing a market environment conducive to new product development to help address the underinsurance problem in many countries in the region,” he said. In a fast-changing world, businesses are facing new risks and are seeking new insurance products from the insurance industry to protect their assets. Lloyd’s believes the first step in new product development is to identify new and emerging risks and quantify those risks, and that is the rationale behind Lloyd’s emerging risk report series. “The Lloyd’s City Risk Index has proved to be an invaluable source of data since its launch in September last year. We partner with institutions to look at different emerging risks; we are part of a cybersecurity initiative in Singapore called CyRIM, and have just completed a project with the UK Met Office that analyses the extent of the interconnections between extreme weather events,” Chaplin said. “In a separate study with the UK Met Office and Guy Carpenter we are looking to develop index-based insurance solutions for natural hazards such as drought, combining scientific understanding of natural hazards with sophisticated risk modelling capabilities.” Lloyd’s has also launched a disaster risk facility, a working group comprising a number DAY 3 EAIC TODAY Friday October 14, 2016 What’s inside Powered by: Weak economy triggers credit claims but Lloyd’s Asia boss remains bullish on potential The persisting economic uncertainty, which INTELLIGENT INSURER’S EAIC TODAY 4 SUCCESS IN ASIA IS DEPENDS ON BUILDING TRUST PUBLISHED BY NEWTON MEDIA 4 ON-THE-LIMITED.GROUND CONTACT KEY TO SUCCESS IN MARINE MARKET Registered Address: Kingfisher House,6 OVER-CHALLENGES 21-REGULATION 23 POSES FOR REGION 8 GROWTH AND PROFITABILITY Elmfield has hit some sectors Road,particularly hard,Bromley, is BR1 1LT, United CRITICAL IN CHANGE leading to an increase in credit claims on a scale 10 QATAR RE GOES Kingdom BACK TO not seen since the 2008 financial crisis, Kent BASICS IN ASIA Telephone:Chaplin, chief executive officer, + Lloyd’s 44 Asia- 203 301 8201 12 STARTUPS WILL CHANGE Pacific, told EAIC Today. LANDSCAPE IN ASIA: S&P www.He noted newtonmedia.two recent examples of large co.uk 14 SOLVENCY II MAY DRIVE companies getting into difficulties, which could CAPTIVES TO MOVE TO ASIA lead to more claims. Swiber, the Singapore-based 15 UNDERDEVELOPED offshore oil and gas services group, hit MARKETS WILL CATCH UP financial problems in recent months partly due 16 INNOVATION AND TALENT to low oil prices; and Hanjin, South Korea’s KEY IN ASIAN MARKET DIRECTOR biggest shipping company, sought bankruptcy 17 INSURERS MUST WORK TO in September leaving hundreds of ships and CLOSE PROTECTION GAP their crew stranded at sea. 18 REINSURERS PLUNGE INTO Nicholas “In Singapore, Swiber is a prime example of INDIA SEEKING GROWTH Kent Chaplin difficulties in the oil and Lipinski gas sector, as is Hanjin 19 THE SURETY BOND MARKET in South Korea for the transportation industry,” IS GROWING IN CHINA Chaplin said. increased by around 40 percent year on year. “At Lloyd’s there has already been a steady In the same period, the average value of claims rise in claims among our credit risk portfolio in paid by Lloyd’s has increased by around 70 oversight and excess capacity putting pressure YOUR recent years. As CONTACT commodity prices have fallen, percent year on year. on pricing,” he said. most notably in oil, aluminium and steel, there has More IN broadly,MACAU the market in Asia is facing been a material increase in the number of claims similar pressures to those seen in other regions Opportunity ahead John notified to Walsh the market in trade credit PUBLISHER insurance not of the world, said Chaplin, who highlighted the That said, the combination of low insurance seen since the 2008 financial crisis.” wider pressures facing re/insurers. penetration rates in many countries Since 2013, the average number of new “We continue to see soft market conditions within the region and high risk exposures Telephone:claims advised under the credit +risk 44 code 7803 has with low 04 interest rates,79 increased 86 regulatory particularly from nat cats, (Continued top of page 2) Email:Launch john.of walsh@Nine Merchants newtonmedia.Re shows co.uk ambition of investors A key theme for discussions at this year’s Hong Kong by investment management company the rest of the world for selected clients but it EAIC is the increasingly outward-looking First Seafront Financial with initial capital of $500 expects more than 60 percent of its portfolio to attitude of the Asian re/insurance industry, Aon million. The company has said it will operate a come from Asia-Pacific. PRODUCTION Benfield’s Asia-Pacific CEO Malcolm Steingold AND total return model with a focus on delivering “I expect there will be quite a bit of told EAIC Today. efficient risk capital DESIGN to clients by leveraging its discussion around not only what its agenda “Globalisation is a theme, and related to that shareholders’ asset management capabilities. will be but also about this as a reflection of Fisherman is the latest potential reinsurer Nine Merchants Re, the founders Creative on the horizon, It will initially underwrite treaty reinsurance what is happening in this part of world, where of which have emanating from Asia-Pacific with a focus on if people have the necessary expertise, they had their capital confirmed at half a billion China and other developed markets such as have the ability to raise half a billion dollars dollars,” he said. Korea, Japan and Australia/New Zealand. It in China to support a global reinsurance Nine Merchants Re was recently formed in will also underwrite business emanating from strategy,” Steingold said. (Continued top of page 14) ©Newton Media Limited 2016. All rights reserved. www.intelligentinsurer.com | www.bermudareinsurancemagazine.com DAY 3: Friday October 14 2016 | EAIC TODAY | 1 No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electrical, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. The views expressed in Intelligent Insurer’s EAIC Today are not necessarily those shared by the publisher, Newton Media Limited. Wishing to reflect the true nature of the market, the editor has included articles from a number of sources, and the views expressed are those of the individual contributors. No responsibility or liability is accepted by Newton Media Limited for any loss to any person, legal or physical, as a result of any statement, fact or figure contained in Intelligent Insurer’s EAIC Today. This publication is not a substitute for advice on a specific transaction. The publication of advertisements does not represent endorsement by the publisher. Intelligent Insurer – ISSN 2041-9929 of syndicates pooling capital and expertise aiming to provide capacity and expertise to develop reinsurance solutions to address nat cat risks in emerging economies. “The group is working to coordinate with underwriters operating in the Lloyd’s market in Singapore to identify strategic initiatives in Asia-Pacific,” said Chaplin. In addition, Lloyd’s has partnered with Parima (the Pan-Asian Risk Manager Association) to host the Lloyd’s-Parima Professional Development Programme, a series of two-day masterclasses designed to build knowledge and expertise for risk managers. “The programme launched in Singapore in August, the next masterclass will be held in Hong Kong in November. It is similar to the dedicated Lloyd’s programmes run for brokers and regulators,” he concluded. n 2 | EAIC TODAY | DAY 3: Friday October 14 2016 www.intelligentinsurer.com | www.bermudareinsurancemagazine.com


EAIC Today Day Three 2016
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