On Nov. 4, Inga Beale officially opened Lloyd’s new expanded specialist underwriting platform in Singapore, which Kent Chaplin, head of Lloyd’s in the Asia-Pacific region, described as “an exciting new chapter” for Lloyd’s.
“Lloyd’s is now up to 24 syndicates in Singapore and we’ve had two new ones just start in the last six months,” Beale says. “The competitive environment here is very tough, but Lloyd’s is actually the number-one writer of offshore insurance premiums from around the region into our Singapore hub.”
Beale shares excitement at the ever-growing contribution Asia-Pacific is making to the total business the market writes worldwide. “Globally, Lloyd’s wrote about $40 billion in business last year and $4.7 billion was from Asia-Pacific,” she says. “Between 2010 and 2014, we’ve seen 27% premium growth from Asia-Pacific.”
Asia-Pacific is also becoming a bigger part of the Lloyd’s story through its role in helping diversify the market’s capital base. “If the latest Japanese acquisitions go through via MSIG (Mitsui Sumitomo Insurance Group) and
Tokio Marine Kiln, Japanese insurers will be providing 16.5% of the entire capital to Lloyd’s globally. I think that’s a really interesting number and goes to show how much things have changed in Lloyd’s history from the days of the thousands of individual investors we used to have.
“Today 11% of our capital is provided by the individual names and nearly 90% is now corporate capital. Couple this change with the interest from countries that haven’t traditionally been a big part of Lloyd’s, I think it’s a real transformation and I’m pleased with it.”
The soft market
In September, Lloyd’s announced its results for the first half of 2015.
Among the highlights was a pre-tax profit of £1.19 billion ($1.8 billion), down from £1.65 billion ($2.5 billion) for the same period last year.
Total gross written premium was £15.51 billion ($23.56 billion), up from £14.48 ($22 billion) reported for the first half of 2014.
At the time, Beale said the results demon strated Lloyd’s success “despite challenging underwriting and investment conditions” and predicted pressure on insurance pricing would continue.
So what advice would she offer to brokers about standing out and surviving in the current climate? Beale points to Lloyd’s research highlighting particularly significant under-insurance in 17 countries. “To me, that presents an enormous opportunity, and I’d encourage any broker to go out, look for the gaps in insurance coverage right now and seize the opportunity. “
She adds, “We’ve conducted research with risk managers of businesses around the world – so this is also true in mature economies – which shows that less than 10% of risks they face are covered by insurance. My encouragement to brokers is to work with us to increase awareness, using the studies Lloyd’s publishes around specific risks.”
Vision 2025
Over the next year, much of Beale’s own focus will likely be on Lloyd’s modernization agenda, which is encapsulated in its Vision 2025 strategy. “A lot of what Lloyd’s does in the way it trades is paper-based. There’s lots of multiple entry of the same information throughout the process.
“So we’re embarking on a massive five-year modernization program across the entire market. I’m going to be spending quite a lot of my time in the next six to 12 months on the modernization piece.”
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Modernization of both its systems and the make-up of Lloyd’s market are both high on the list of priorities. A key Vision 2025 pillar is, ensure Lloyd’s diversifies its market by gender, age and ethnicity.
Talking about women in insurance, Beale says there certainly has been progress since she began her career 33 years ago; however, some of the statistics continue to be disappointing. “At the director level, on boards, I think we’ve made great progress,” she says. “And if you look around at the Fortune 500 companies, we’ve got something like 18% representation of women, so the stats are improving.
“But it’s when you look further down organizations, and at executive management positions, that’s where we need to improve the representation of women.”
In its own efforts to address the gender gap, Lloyd’s launched its Inclusion@ LLoyd’s initiative last year. “This is a crossmarket gathering of all sorts of individuals, from brokers to Lloyd’s syndicates to other company insurers,” Beale explains. “We’ve been working at getting people to understand the benefits of having a diverse workforce. We know there are lots of facts and figures to support why diverse teams are more successful.”
More recently – in October – Lloyd’s staged the inaugural Dive In Festival in the London market. “We had four days of celebrations focused on gender, ethnic and cultural differences, the LGBT community, and also WorkAbility, which is an area focused on people with disabilities.”
The festival’s aims extended to trying to remove some of the stigma attached to mental health issues. “People often don’t want to talk about it, and it can really affect them at work. We wanted to celebrate and educate people on the benefits of diversity, and the impact on productivity when people are able to bring their whole selves to work.”
The next generation
Turning discussion to attracting new talent to the industry, Beale says, “We know we’ve got to do something to improve the industry’s appeal.
“I’ve been to career fairs and spoken to students, and when I start informing them about how we support not only individuals to get back on their feet, but businesses, communities, cities, and countries too after a disaster, and how insurance and innovation can stimulate economic growth and investment, I think they see insurance then in a very different light.
“We’ve got to do a much better job of …telling the fabulous story of insurance.”
