angela-kelly_lloyd-s_
Angela Kelly, chief executive officer for Lloyd’s Asia
31 October 2018 Insurance

Lloyd’s Asia seeks innovation in mature markets

Lloyd’s Asia is looking to develop innovative solutions for mature markets such as Japan or Australia while mulling over the introduction of electronic placement to make trading more efficient in the Asia-Pacific region, Angela Kelly, chief executive officer for Lloyd’s Asia, told SIRC Today.

The Corporation of Lloyd’s introduced a mandate for electronic placement in March 2018 requiring each syndicate to have written no less than 10 percent of its risks electronically from the end of the second quarter of 2018 through the Placing Platform Limited (PPL) platform.

“Lloyd’s in Singapore is a direct extension of London,” Kelly said. “The market absolutely has to modernise. We are looking at how we might apply electronic placement here,” she added.

Lloyd’s Asia also plans to work with the Lloyd’s Lab in London, the market’s new innovation accelerator which seeks tech partners to develop solutions for its changing needs.

“We will be inviting our partners in Asia-Pacific to come up with problem statements that might be of interest to the Lab,” Kelly said.

“Many jurisdictions in Asia are highly connected in terms of internet connectivity. We do see that there are opportunities for alternative distribution to make sure the right products are getting to the right segments and that they are effective in the event they need to be called upon,” she explained.

In more advanced economies in the region such as Japan, Australia, New Zealand or Singapore, customers are expecting Lloyd’s to innovate, Kelly explained.

“It’s by having this open conversation with customers and understanding how their businesses are changing that Lloyd’s can work with them to create innovative products,” she said.

“The more developed markets tend to buy more insurance and reinsurance and Lloyd’s is very well positioned.”

Challenges

In other parts of Asia-Pacific where insurance markets are less developed, such as the ASEAN nations, there are challenges, Kelly admitted.

“We have protectionism coming into play. Part of what we do is working with governments to bring global expertise to share with them the benefits of diversification and promoting open cross-border trade, particularly as it relates to reinsurance,” she said.

It is essential for the health of these growing economies in the future to transition the burden from catastrophe events away from taxpayers or governments who can often least afford it, she explained. Governments need to create public-private partnerships, pools and programmes to support resilience.

Singapore has launched what it calls the world’s first commercial cyber risk pool during the conference.

The pool will commit up to $1 billion in capacity, and bring together both traditional insurance and insurance-linked securities (ILS) markets to provide bespoke cyber coverage.

To date, 20 insurance firms have indicated their interest in participating in the pool, which would allow corporates in ASEAN to be protected against cyber-related losses, according to an official statement.

“The announcement is a positive step forward,” Kelly commented. “These sorts of initiatives are very important to help develop the market and create access to cyber protection.

“We see a growing need for cyber insurance in this part of the world and Lloyd’s is working closely with a number of stakeholders to bring our expertise in and share that with markets and also in terms of product development,” Kelly said.

The Lloyd’s Asia cyber business has increased six-fold over the past few years, and while it was from a low base, she noted, it is an indicator of the growth potential.

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