Industry must weather changes: Nelson
The re/insurance industry must be able to weather changes as the market comes to a crossroads, according to John Nelson, chairman of Lloyd’s.
In a speech to the Bermuda Monetary Authority (BMA), Nelson said: “The emergence of these new markets in seriously underinsured economies, such as South East Asia, South America, China, Brazil and India, is undoubtedly changing the landscape. What an opportunity this presents! And this is just the beginning.”
Nelson also spoke about the recent study undertaken by Boston Consulting Group and commissioned by the London Market Group, which claimed that London market is at a tipping point as it fails to capture opportunities in emerging markets.
"What is fascinating and reassuring to me is that this industry report very much reflects the trends we identified at Lloyd’s three years ago. And it is these trends that led us to develop our long term strategy, Vision 2025," he said.
On the evolution of risk, he said that one quote in the report had stood out – from the chief executive officer of a risk management organisation, that only 10 percent of the corporate risk map is covered by insurance.
“If I reflect on my non-insurance business life in large corporates, the major risks faced by business are increasingly diverging from the products provided by the insurers,” he said. “Our challenge must be to provide the right risk mitigation as business models change. If we don’t, others will.
“But I hope the report also wakes all of us up to the real competition - not necessarily each other, or the international insurers and reinsurers we know so well, but increasingly from the local players in higher growth countries across the world – and from new types of capital, and new types of structure, entering the market.”
