The two events weren’t connected, but as luck would have it Lloyd’s launched its branch office in Germany exactly 20 years ago, just as the reunification process was set in motion.
The Cold War ended abruptly for millions of Germans on November 9 1989, the day the Berlin Wall fell. And incredibly, against all expectations, it ended with a party rather than a bang.
East Germans were told without warning in a televised government press conference that they were now free travel to the West. The concession came after an unprecedented series of mass rallies sent the East German authorities into retreat.
There was a surreal atmosphere late that evening when people testing the announcement were waved through the Berlin Wall by guards. After 38 years of armed sentries, dogs and watchtowers the crossings were open!
Within hours, thousands had descended on iconic Berlin landmarks like Checkpoint Charlie and a carnival was underway.
No turning back
Once the Wall was breached, there was no turning back. Within a month, the shortlived East German leader Egon Krenz followed his famous predecessor Erich Honecker out of the door and East Germany was on the path to reunification with West Germany.
Lloyd’s demonstrated uncanny timing – a new branch office for West Germany was being readied in Frankfurt for around that time. “It was really a coincidence. Lloyd’s had planned to open a branch office in West Germany earlier in 1989 and the grand opening event was in December of that year,” remembers Burkard von Siegfried, who now runs the office.
Lack of bloodshed was remarkable
That it was possible for Lloyd’s to go ahead according to plan was down to the lack of bloodshed and the unforeseen surrender of the East German authorities to the will of the people.
“What was remarkable about the reunification in hindsight is that there was no violence,” Mr von Siegfried says. “But we should remember just how brave the people of the GDR were at that time. When they first started to demonstrate peacefully in Leipzig, citizens risked severe repercussions from the state.
“In the end it was an entirely natural reunification of Germany, a very happy time for the people on both sides, and of course led to the fall of the Iron Curtain.”
The West German insurance market easily expanded to embrace the East. “Again this was entirely natural because the GDR was a communist state-run economy and when that collapsed the insurance system of the west was adopted,” von Siegfried says. “German insurers made the transition very easy for people.
German insurers had masterplan
Most German insurers already had a masterplan ready for the day the Iron Curtain fell, von Siegfried says: “The insurers were prepared for it and there was no shortage of insurance protection for people adapting to their new freedom.”
Lloyd’s originally started its branch office in Germany in order to be able to cater to direct insurers and to write primary insurance. Back then, before the EU’s freedom of services liberalization came into force, a branch office was a legal requirement. Twenty years on, the Lloyd’s brand has become established on the scene.
“We’re achieved a lot. We are now a local player in Germany, thanks to our coverholder arrangements in Germany,” von Siegfried says. Coverholders include six managing agencies running service companies: Beazley, Catlin, Hiscox, Liberty, Omega and Starr Marine.
“We hope to see more Lloyd’s companies join this distinguished list in the future,” he adds.
Many foreign insurers have found the German market tough to crack. But Lloyd’s has made good inroads. “Several High Street businesses that have strong local relationships with their clients also have Lloyd’s coverholder status,” von Siegfried points out.
“On the commercial and industrial side, client portfolios tend to be more diversified and require brokers to service them. So that also plays to Lloyd’s strengths, as a broker market,” he adds.
Lloyd's Germany supports local business
Lloyd’s Germany aims to help Lloyd’s service companies grow their business in the country by providing useful support functions. “The Lloyd’s Germany office doesn’t itself write insurance or reinsurance business but through relationship management can help clients find risk transfer solutions where capacity is constrained or know-how is needed,” von Siegfried explains.
Volker Eutebach, who was recently appointed head of market relations facilititates networking events and seminars that bring clients such as big corporate insurance buyers together with brokers, for example, to discuss particular business classes. “Last week for example we held a marine insurance seminar in Hamburg,” von Siegfried says. “We are also very focused on regional, independent brokers to help them understand how they can access the Lloyd’s market.”
