Beazley pursues greater diversification in APAC, with investment in more product lines

Beazley already runs a diversified book of business in the Asia-Pacific region and as a result is quite resilient, with plans to diversify further with new product investment, according to Lucien Mounier, head of Asia-Pacific region at the firm.

“We’re performing well in some areas and less well in others, and you have to manage the cycle across various products,” he told SIRC Today.

Mounier said that the challenge for many Lloyd’s syndicates and other businesses of a similar size to Beazley is gaining diversification and scale.

“If you have a diversified book of business, then you achieve scale, and you have resilience. I think we’re there but we’re still investing in more products.”

The company has announced it will take a more strategic view of the Asia-Pacific region.

In practice this translates partly into hiring up to 10 people to work within multiple new products.

Explaining which lines investment will focus on more broadly, Mounier said: “Transaction liability is an area where we are investing, and jewellery and fine arts.

“Cyber is an established player in that market but we want to reinforce those capabilities as well. A&H is another, with a focus on personal accident, and last but not least specialty treaty where we do a variety of things, from surety treaty to white label financial lines solutions.

“We’re developing all of those new lines of business in this region.”

In terms of a greater strategic approach to distribution, he said: “Beazley trades through brokers and this is something we will continue to do in the region.

“Because of our licensing and the small footprint we have here, we rely heavily on local cedants and insurers across the region.

“If you look at the penetration of insurance, it is very low in Asia. The penetration of specialist insurance in some of the lines I mentioned is even lower, so there’s a real challenge for us, in distribution but also higher up around education on the specialist products we are distributing.”

To help remedy this, Beazley’s team travels around the region spreading the word, as well as speaking to the media, and focusing on the firm’s relationships with local markets.

The firm is appointing a partner to manage that distribution with local insurers. This will mean that rather than relying on a local insurer to do one thing at one time (for example, if Beazley is writing a D&O policy in Indonesia, which would require a fronting company because the firm is not licensed there), the firm will find a partner and then issue that policy together.

Mounier said: “This is great, but the company wants to take an even more strategic view to cedants.

“We want to say to cedants ‘we want someone to front an amount of deals across various lines of business, but what else can we do together? Do we work with you on your treaties—from property treaty to A&H to financial lines treaties?’,” he said.