A view of the world from Lime Street

Though the global economy remains fragile, Lloyd’s is already planning for the future with a strategy for international growth aimed at grabbing the chances that will come when the upturn gathers strength, says Jose Ribeiro, Lloyd’s Director of International Markets and Business Development.

“There are still plenty of opportunities out there and we need to be prepared to reap the benefits of those,” Ribeiro says in an interview with lloyds.com.

Cultivating more business from Europe is a key target contained in the market’s latest three-year plan and Lloyd’s has identified coverholders as the best distribution channel to achieve that growth, rather than going head to head with the continent’s major insurers in their own backyards.

Developing the market’s business in China is also a top priority for Ribeiro. “China is a huge challenge; it is a key market for us, to which we will continue to commit resources and time. We want to continue to develop our reinsurance business in China, as well as explore some opportunities to write direct business there.”

Good progress in Brazil

He is pleased with the progress Lloyd’s has made in Brazil, where just a few years after being granted a licence as an admitted reinsurer following the dismantling of the state monopoly on reinsurance business it is now the second-largest player in the fledgling market after the mighty IRB.

“Since we opened an office in Brazil we’ve seen our business there grow considerably. We see huge potential in that market. The challenge is to ensure we write profitable business as competition increases and the IRB reacts to its leadership position being threatened.”

In contrast to the bright prospects in both China and Brazil, progress in India remains disappointingly elusive. “India is a very different story. We’ve been trying for years to get a licence to operate there. We have worked hard with the regulator, but we haven’t got to where we would like to be. It is an important market for us: we get more than $400 million in premium income as an offshore reinsurer. But there isn’t much more we can do for the time being, without a licence. That has been a big frustration to us. But I’m an optimist – I believe that eventually India will open up, as China and Brazil have done.”

Bright prospects in Russia, Mexico

Russia, the last of the BRIC quartet of fast-developing economies, is another market on which Ribeiro and his team have lavished much attention. The benefits are already starting to be seen: Lloyd’s increased its reinsurance income from there in 2009, despite the fact the Russian reinsurance market as a whole shrank, as Lloyd’s benefited from a flight to quality when the financial crisis bit hard into the finances of local players.

In May, Lloyd’s is organising a market trip to Russia, with a list of appointments to meet the key reinsurance buyers and brokers. The fact-finding mission will allow Lloyd’s players to get a valuable insight into the Russian market as well as giving local cedants the opportunity to find out more about doing business with the 350 year-old market.

The trip is an acknowledgement that Russia will soon be one of the most powerful players on the world’s economic and political stages. But it will also allow Lloyd’s insurers to learn more about how Russia plans to diversify its economy away from a dependence on its huge mineral wealth, says Ribeiro.

“They want to develop their knowledge economy as well as specific niches that will require insurance and reinsurance support. So there is an opportunity for Lloyd’s not just in the traditional classes of business but also in new classes that will emerge as a result of the economic transformation that the Russians want to implement.”

Another market Lloyd’s is targeting is Mexico, which although it is in the depths of its worst recession in living memory shows immense promise. “Mexico has been hit hard, mainly as a result of its dependence on the US. As the US economy picks up then so will Mexico’s.” Ribeiro is to organise a market visit to Mexico in the near future, which will help to decide whether Lloyd’s should establish a representative office there to help raise the market’s profile in the country.

“The fact that most of the leading Mexican insurers are local companies is quite interesting to us, because they have more independence to make their own decisions about reinsurance than the local subsidiary of a major international insurer,” he says.