Buyers in Asia becoming more selective

A key feature of the Asian market at present is that buyers are becoming more selective, Matt Cannock, managing director of Markel International Singapore, told EAIC Today.

“When there is a lot of capacity, pricing is not really a problem from a buying perspective,” he said. “They are starting to ask what they are actually getting, and people are more concerned about counterparty exposures than they were.

“We are starting to see a lot more interest in who your underwriters are, where they are located, and what your service standards are.”

There is also a growing expectation that you must have an experienced person handling claims, Cannock added.

“Pricing is not suddenly going to double overnight but the current opportunity is to make the business better.”

Markel International is currently expanding its trade credit portfolio, with events such as the collapse of South Korea’s Hanjin Shipping helping to fuel demand, added Cannock.

“People are very aware of their counterparty exposures, and things like Hanjin make people think about what would happen if their biggest customer went insolvent. That focuses people’s minds.”

As capital requirements become stricter, Markel International is also seeing a lot of interest from banks, and is working closely with them on hybrid models that fit with the banks’ capital models.

Another key area of growth for Markel International is China, where it recently joined the Lloyd’s China platform, enabling it to offer a local solution for Chinese insurers seeking to purchase treaty and facultative reinsurance. Capacity is provided by Markel’s Syndicate 3000 at Lloyd’s and written through the Lloyd’s China platform.

Markel started actively underwriting in China on the Lloyd’s platform in January 2016 and Cannock is pleased with progress so far.

“This year has been very much about organising ourselves; there are a lot of moving parts, so it’s taken us time to bed that down. We managed our expectations as to how successful it would be but we are really happy; we know it’s a difficult market but we have exceeded our expectations. It is a very functional part of our business now and it fits in with everything else that we are doing.”