Lloyd’s syndicates combine to help developing economies build resilience against natural catastrophes
Lloyd’s syndicates offer specialist underwriting expertise and new insurance capacity designed to help developing economies build resilience against natural catastrophes
Eight Lloyd’s syndicates are joining forces to develop new solutions to help developing economies tackle underinsurance and improve their resilience against the economic impact of natural catastrophes.
Emerging economies across Latin America, Africa, and Asia currently contribute 40% to global GDP, yet represent only 16% of global insurance premiums. In the event of a natural catastrophe, this level of underinsurance can damage growth and hamper economic development.
The eight Lloyd’s syndicates have committed capacity of US$400m towards solutions that address natural catastrophe risks in emerging and developing economies. Key to its effective deployment will be well designed risk sharing initiatives and the diversification of risk.
The initial group of Lloyd’s syndicates participating in this new initiative are managed by Amlin, Beazley, Hiscox, Mitsui Sumitomo Insurance Group, Nephila, RenaissanceRe Syndicate Management, Tokio Marine Kiln and XL Catlin. However, membership is open to the entire Lloyd’s market and other managing agencies are welcome to participate.
The group has issued an open invitation to work with international organisations including but not limited to the World Bank and the British government’s Department for International Development. It will also look to strengthen its existing ties with several current global initiatives, such as the Insurance Development Forum created by the International Insurance Society.
The group plans to engage with governments, municipalities, and non-governmental organisations, in addition to Lloyd’s usual, valued client base.
This collective initiative means the Lloyd’s market can help provide the insurance solutions needed to build resilience to natural hazards and promote risk awareness around the world. We are keen to work closely with organisations across the globe to help protect economic growth in developing countries.Tom Bolt, Director of Performance Management at Lloyd’s
Contacts
For Europe enquiries
Patricia Gondim
Head of Global Communications
For North America enquiries
Lizzie Lowe
Regional Head of Communications, North America
For China enquiries
Grace Gu
Regional Head of Marketing & Communications, Greater China
Lloyd’s Corporation can and does support the market with such initiatives through raising awareness of what the market can offer with the organisations who are involved in this area. We also act as an initial point of contact for anyone who wants to find out more. The Facility is being offered by the Lloyd’s managing agents listed in the announcement.
The Facility membership is open to the Lloyd’s market, and will provide clients and intermediaries with access to the combined expertise and capacity of a range of Lloyd’s managing agents who are committed to developing innovative solutions for populations which suffer some of the most serious losses, yet which currently have little or no access to insurance. We anticipate our counterparties to include governments, municipalities, non-governmental organisations in addition to our usual and valued client base.
The ability to measure the frequency and impact of natural hazards around the world has been transformed thanks to the wealth of data generated and captured by new digital technologies and systems. This data allows insurers to understand risk exposures with a higher degree of accuracy and build the insurance solutions that cover the right risks, in the right places, and crucially, responds at the right time.
Crisis management and disaster response are significant parts of what we excel in at Lloyd’s but with most of the world being either uninsured or underinsured we see too many disasters where the (re)insurance industry suffers little loss and does not play a significant part in the rebuilding.
Today’s emerging markets across Latin America, Africa, and Asia contribute 40% to global GDP, yet represent only 16% of global insurance premiums. This disparity suggests large-scale underinsurance. Lloyd’s own research estimates that there is a global insurance gap of around $170 billion US dollars in terms of premiums - premiums which are needed to protect economies against their catastrophe exposures. In a study of 42 countries in the 2012 ‘Lloyd’s Global Underinsurance Report’, we found that 17 of these countries were underinsured against their exposures and eight of these countries were in Asia. We recently launched our City Risk Index working with Cambridge university (see http://www.lloyds.com/cityriskindex/ ). This index considers 18 hazards faced by 301 major global cities and shows that over the next 10 years some USD 4.56trillion of GDP is at risk – much of this can be reduced through appropriate risk management or via risk transfer.
The formation of this facility confirms that there is significant interest in the Lloyd’s market to offer such risk transfer.
For further information, please contact:
Alex Dziedzan
Tel: +44 (0)20 7327 6125
Email: alex.dziedzan@lloyds.com