Lloyd’s would be “fool-hardy” to ignore emerging hubs, says Beale

Inga Beale, the chief executive of Lloyd’s, challenged the notion that the growth of global business hubs such as Singapore could be damaging to the London market, and Lloyd’s in particular, in a speech in Singapore today (Tuesday May 12).

At an event hosted by the General Insurance Association of Singapore, Beale stressed that London would remain the global hub for Lloyd’s – its depth of underwriting and broking talent remaining critical to the market’s success. It also has geographical and time-zone advantages, she said.

But she also argued that Lloyd’s would be “fool-hardy” to ignore some of the new centres of excellence that are emerging.

She highlighted a report from McKinsey that suggested that, by 2025, 45 per cent of the world’s largest companies will be headquartered outside of Europe and America.

“Many of these businesses will have specialist risks which will continue to require underwriting expertise from our London hub,” Beale said.

“But such businesses will not want to fly into London at the drop of the hat. Businesses will want to access insurance in their local market, by brokers and underwriters who know their business and can speak their language.

“It is only by growing Lloyd’s Asia that Lloyd’s will remain the world’s market of choice for specialist insurance and reinsurance. Lloyd’s will only stay relevant as a platform if our syndicates understand local markets and local risks – and if we build relationships with clients all around the world.”
Beale also highlighted under-insurance and emerging risks such as cyber and supply chain security as being potential growth areas for Lloyd’s, saying that she wanted to use Singapore as a regional hub to drive business across Asia.

This would be facilitated by the recent decision of the Monetary Authority in Singapore to grant Lloyd’s Asia the power of sub-delegation. Singapore-based underwriters operating on the Lloyd’s platform will now be able to sub-delegate authority to intermediaries in Singapore and in other key markets in the region.
“Lloyd’s Asia is not an office: it is a market, where brokers are able to negotiate, face to face, with 18 service companies based in one building,” she said. “Those companies are an extension of their London operations: they can access capacity and make underwriting decisions independently.

“We want to continue to expand, concentrate and cluster that underwriting and broking talent. And we want to use Singapore as a platform to drive Lloyd’s business across Asia. Previously Lloyd's coverholders in the Asia Pacific region would have to be appointed and managed from London. Now that Lloyd's Asia can appoint its own coverholders, more business can be tied to Singapore rather than to London. So this is another important step forward in our journey to grow Lloyd’s Asia.”