New direction to ride out perfect storm
By Li Xiang | China Daily January 10, 2017, 12:10 am TWN
What Lloyd's of London chairman John Nelson sees is a "perfect storm" facing the global insurance market.
He says the exceptionally low interest rates and the excessive amount of capital in the insurance sector are driving down both investment returns and premiums for insurers.
Nelson also notes the rapid development of technology, which has also increased competition in the markets by changing the relationship between insurers and their customers.
Lloyd's of London, the world's oldest market for specialist insurance and reinsurance, is responding with a strategy known as Vision 2025, according to Nelson.
One of the highlights of the strategy is international expansion. A core to that is China which will remain one of the most important frontiers for the institution, as it continues to evolve from its start as a coffee house in London dealing in marine insurance in the 17th century into a global market place where more than 200 insurance brokers come to pool and spread risks.
Nelson spoke recently with China Daily about the insurance market's strategy and its plans in China. The following are edited excerpts from the interview:
How do you see the growth potential of the Chinese insurance sector and what opportunities are there for Lloyd's?
Over the last few years China has become an extremely important platform for the Lloyd's market. In Shanghai and in Beijing, we now have over half of the Lloyd's managing agents physically present on the platform－31 to be precise.
We have increased our business substantially on this platform to 792 million yuan ($114 million) in gross written premiums in 2015, and we are confident we will surpass 2 billion for the past year and we continue to see China perhaps as the most important growth market in the long-term for Lloyd's.
Insurance can provide vital support and protection, allowing Chinese companies to offset risks and focus on growing their business. In particular, Lloyd's has the specialist expertise for the sorts of large construction, energy, marine and transport projects that this country is investing in.
As a platform for international expansion, Lloyd's provides a really good springboard for Chinese insurers wanting to develop their international strategies.
For example, China Reinsurance Group has joined the Lloyd's platform. We also signed a memorandum of understanding with China Taiping Reinsurance in October 2015.
I think gradually these things take time and that global carriers from China coming onto the Lloyd's platform will increase.
MOST POPULAR OF THIS SECTION