Brexit distraction slows Lloyd's expansion into emerging markets
Uncertainties around Brexit mean Lloyd’s focus is on retaining its foothold in Europe – at the detriment of seeking further growth in emerging markets, the market’s chief financial officer has said.
Lloyd’s has been losing market share in high-growth emerging markets for several years. “In terms of expanding our license network, the focus is keeping what we have,” said John Parry, Lloyd’s CFO, during a March 21 press conference.
The London Market is falling behind in reinsurance premium growth compared with other hubs such as Zurich or Bermuda, according to the latest London Matters report. The London Market is also missing out on opportunities in high growth regions such as Asia, Latin America and Africa, where its market share is declining, the report suggested.
Because of Brexit, Lloyd’s is deploying capabilities to make sure that it can continue servicing its clients in the European Union. Lloyd’s is setting up a new European insurance company in Brussels. “We want to be in place for Jan. 1, 2019, in terms of new business,” Parry said. The Brexit contingency plans may cause running cost of around €20 million or €25 million per year, Parry noted. The costs will be defrayed across the entire premium base of the market.
Regarding the current business that Lloyd’s writes in the European Economic Area (EEA), Parry is still hoping for a political decision that gives it the required legal framework post-Brexit. Some firms have already started to transfer liabilities of existing business to European subsidiaries, he noted.
Because of the Brexit project as well as market conditions, Parry believes that opportunity costs would not justify further expansion activity in emerging markets at the moment.
Instead, Lloyd’s expects to continue to benefit from its US foothold with its emphasis on excess and surplus lines, the China platform and, later on, from the recently acquired Indian onshore reinsurance license, Parry explained.
Join us at Intelligent Automation in Insurance - London 2018. Spring Special: Book before March 31st and save £200.
More of today's news
Thomas Miller appoints new chief executive of P&I subsidiary
GE's $15bn LTC reserve charge read-across to sector by analysts
Already registered?
Login to your account
If you don't have a login or your access has expired, you will need to purchase a subscription to gain access to this article, including all our online content.
For more information on individual annual subscriptions for full paid access and corporate subscription options please contact us.
To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.
For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk
Editor's picks
Editor's picks
More articles
Copyright © intelligentinsurer.com 2024 | Headless Content Management with Blaze