Hong Kong Lloyd's DayWed 05 Apr 2017
Speech by Inga Beale at the Hong Kong Meet the Market
Speech by Inga Beale at the Hong Kong Meet the Market
So the industry must keep working to demonstrate why open insurance markets are so important.
I am happy to say that Hong Kong seems to have realised this – it came 4th in the World Bank’s annual ease of doing business index in 2017. Hong Kong was also judged the world’s freest economy for the 23rd consecutive year under the 2017 Index of Economic Freedom.
Lloyd's and the local market
So – with that said, what are we, Lloyd’s, doing in Asia - a substantial market for us already – what are we doing to help grow the local market?
Lloyd’s is a leading provider of reinsurance solutions for complex and specialist risks in Asia and offers specialist cross-border insurance in specific markets.
Lloyd’s is licensed in Hong Kong according to our “traditional” market model.
Central regulatory oversight is provided by Lloyd’s Hong Kong and we are treated as a single insurer.
There are 26 Hong Kong coverholders, a mixture of brokers and agencies, and nine service companies.
Our total business written in and from Hong Kong in 2016 was over US$250m – with marine, energy and casualty the main classes of business.
We are continuing to build on our business relationships and offer new capacity and specialist products to support the growth of the industry across the region. By leveraging Lloyd’s local reputation, we can seize new business opportunities on the ground.
And as cities expand across the region, so does the value of assets requiring protection - so we see significant potential for development in specialist insurance and reinsurance.
That’s true too for Hong Kong – it’s very exposed to natural catastrophes and manmade threats – so there is a good opportunity for city officials, businesses, and Lloyd’s to work build on the work you have already done here to make Hong Kong more resilient to them.
We suggest a number of ways we could do this in a new Lloyd’s/Arup report – Future Cities – that you can find on our website. It analyses past reactions that have been taken to restore and protect infrastructure during and post disasters - and uses the lessons learnt to suggest better ways of doing things.
So now to some global industry trends, including a word on market conditions – whether you are an insurer or a broker, it’s tough at the moment.
Low interest rates are attracting new capital into insurance markets. Technology is allowing risks to be packaged up and commoditised, attracting this new capital and driving down prices. Insurers are cutting costs and changing their growth strategies.
Technology is also affecting brokers. Now customers can go direct to insurers, challenging distribution models. Broker facilities are becoming increasingly popular.
At the same time, businesses are finding themselves exposed to new threats such as cyber-attacks and new liabilities created by new technology. Just who is responsible for a driverless car crash?
All of these changes are taking place at a time when we are seeing a change in attitude towards globalisation, with both Brexit and Trump’s election based on the more protectionist approach I mentioned earlier.
Faced with difficult market conditions, Lloyd’s is working hard to make sure that the ways you access the Lloyd’s market are as efficient and as simple as they can be.
Working through coverholders is an excellent way for us to offer local Lloyd’s policies to customers. We’re committed to growing our coverholder model and making working with Lloyd’s easier and more efficient for coverholders.
Local insurers benefit because by becoming a coverholder, they can partner with Lloyd’s syndicates and increase their portfolio by offering innovative Lloyd’s products. This helps grow the local insurance market.
And it means policyholders can access Lloyd’s products in their country, in local languages and with local services, backed by the extra security of Lloyd’s Central Fund – a mutual fund that sits behind all the policies we write and pays claims in the unlikely event your insurer can’t.
We want to grow and support these networks. We want to start at this Meet the Market, which is an important event to do this, and it will be a major focus for us in Hong Kong in the coming years.
We are also helping businesses navigate the fast-changing risk landscape by providing insight into new and emerging risks – and by developing new products.
For example, last year, we created 15 new products for cyber insurance.
Lloyd’s is renowned for innovation, and through its reports on emerging risks, market intelligence and the combined expertise of the syndicates, Lloyd’s offers businesses in this region additional, bespoke coverage the local market does not have the capacity to offer.
So why work with Lloyd’s?
Lloyd’s is helping to grow the insurance market here, and across Asia.
We support business growth at home and abroad. Through Lloyd’s multiple distribution channels you can access our underwriting expertise and knowledge in more than 200 territories across the world.
All our policies are backed by our Central Fund, which as I mentioned earlier, backs every insurance policy that is written by us. This is unique to Lloyd’s.
And we are investing in innovation and technology to make it easier for you to do business with us.
Thank you for joining us today and enjoy the day.