Markel strengthens board of directors
Christian Stobbs, managing director Asia, Markel
A common theme among recent Intelligent Insurer interviewees is that many of the insurance firms within the Asian region have been looking to expand and hire new people—a movement born out of a growing sector.
The latest to talk about this was Christian Stobbs, managing director for Asia at Markel International, who came to the 1.1 Club, Intelligent Insurer’s online and on-demand platform for one-on-one interviews with industry leaders.
Stobbs said that the last 12 months in the Asian region had been “tremendously encouraging” for Markel.
He went on: “The business in Asia is a relatively new part of Markel’s 90-year operation. But so far this year, our top line is up 30 percent and we’ve delivered a sub-90 percent combined ratio.
“We’re very happy with the performance of the business. But the excitement for me has been building out the team. We’ve recruited a huge number of people in the last 18 months or so.”
“We’ve seen a huge surge in demand for cyber insurance in this part of the world.” Christian Stobbs, Markel International
He elaborated: “In that time, we’ve hired 12 new underwriters, all of whom are empowered to take underwriting decisions. We’ve added to our claims and operational teams as well.”
All of this recruitment has taken place remotely as the world is still trying to deal with the COVID-19 pandemic. It is a model that Stobbs said was symbolic of the insurance industry’s flexibility.
“Similarly to many insurance companies, we pivoted quickly to this new working model. And we used it for recruitment. One of the hardest things is to recruit without meeting people face to face, but with Markel’s on-the-ground presence in six different Asian territories, we’ve been able to do it,” he explained.
Underlying this growth is the huge apparent potential of the markets in the Asian region. Stobbs said that the area was “full of opportunities”.
“One opportunity, as a relatively new firm out there, is our business in India, where we’ve been on the ground for only two years. When you’re new to the market, you see a huge number of opportunities come your way, which is exciting,” said Stobbs.
A new market
It is a market that is unrecognisable today from how it was decades ago. Stobbs said: “There’s a few macro drivers in the market, one of which is the repatriation of commercial and specialty risks back to Asia. I was talking to a broker who had been here in Singapore back in the 1970s. He said that when he arrived as an expat from London, there was one reinsurance company.
“When I look around the market now, every main reinsurer has a Singapore office. That’s a big shift. In the 1970s, 1980s, and 1990s, you had to go to the international markets in London if you were looking for reinsurance. It’s much more available nowadays,” he explained.
A key issue among Intelligent Insurer interviews this week around SIRC has been the protection gap in Asia. Stobbs says that he sees the gap in two parts: asset risk and liability risk.
“What we’ve seen over the last few years is a gradual closing of the asset protection gap,” he said. “You’ve got people in companies generating more cash and buying more property, along with a growing middle class, who have more valuable assets to protect.”
The greater challenge, he says, is in the liability protection gap. “We know that in this part of the world, there are historically low levels of litigation compared to what you might see in Europe, US, or Australia. As a result of that, there is a lower level of risk if you’re not being litigated against.
“If the next pandemic does come along, it would help to have a better plan in place.”
“But we’ve looked at what’s going on recently in the cyber world, and the increasing prevalence of ransomware attacks and cyber risk. Suddenly, you’re creating awareness of the risks that you have, and we’ve seen a huge surge in demand for cyber insurance in this part of the world.”
He added: “What will close that gap is more awareness of the risks that companies or individuals have, along with the solutions that you can get from the insurance market.”
A resurgent COVID-19 pandemic, as is being seen in Europe at the moment, or a newer, deadlier one is a risk that more people are aware of. How much of a role does the insurance industry have in finding a solution to this?
“That’s tremendously difficult to answer,” said Stobbs. “One reason is that the pandemic has proved that COVID, as a risk, is almost uninsurable. The reason is that government bailouts for the pandemic have cost the economy trillions and trillions of dollars, which is far more capital than any insurance company has.
“While we’re in the business of risk transfer, we can transfer that risk only when there is the capital to absorb it. So pandemics—and this pandemic—are a very difficult risk.
“But because we’re in the business of risks and risk management, we understand risk quite well. So we can work to help educate the companies we work with to ensure that they have pandemic resilience in place. Because if the next pandemic does come along, it would help to have a better plan in place than perhaps many of us did at the start of all of this.”
To view the full 1.1 Club interview click here
SIRC 2021, Markel, COVID-19, Claims, Commercial, Specialty, P&C, Cyber, Insurance, Reinsurance, Christian Stobbs, Asia Pacific