Lloyd's plans market for Singapore
Lloyd's plans market for Singapore
SINGAPORE (Reuters): A miniature version of Lloyd's of
London's UK insurance syndicates could be operating in Singapore
by late next year, a top Lloyd's executive said yesterday.
"What we want to be able to do is create a mini Lloyd's market
for those syndicates who wish to do business in this market
(Asia)," Nicholas Prettejohn, managing director of Lloyd's
business development unit said.
"We aim to have Lloyd's Asia established in late 1998 or early
1999. There's quite a long way to go, but that is our objective,"
Prettejohn told delegates at the Singapore International
Insurance Brokers Conference.
In March, chairman Sir David Rowland revealed that market
representatives were in discussions with Singapore's insurance
regulator, the Monetary Authority of Singapore, on how to set up
a physical underwriting presence for Lloyd's.
Lloyd's wants an underwriting operation in Asia to help
bolster its position as a leading global insurer.
It opened an underwriting company in Tokyo in March based on a
partnership between the corporation and several syndicates to
underwrite business in Japan, where the market generated net
premiums of about 110 million sterling (US$179 million) in 1996.
It is the market's first overseas underwriting base in its
300-year history, but is not a true replica of the Lloyd's market
structure in London, which is in essence what is being proposed
in Singapore.
Copying London poses unique licensing problems because Lloyd's
structure of 164 individual businesses, or syndicates, trading
under one brand name creates difficulties for regulators.
Accommodating all syndicates wanting to trade physically in
Singapore without creating onerous compliance issues is a central
part of the discussions, Prettejohn said.
"The discussions are still underway and there's quite a long
way to go before we can say how we will operate here," he said.
Prettejohn could not say how many syndicates were likely to
set up Lloyd's Asia in Singapore, although market sources have
suggested that up to two thirds could be interested.
"I would expect the business in Lloyd's Asia, Lloyd's
Singapore to grow over time to achieve a critical mass so that
anybody at Lloyd's who had business in Asia would want to be here
with a physical presence," he said.
Syndicates in London generated about 335 million sterling of
net premiums in Asia in 1996. Because of the three-year
accounting rules under which Lloyd's works, the final figure
could be higher.
In 1995, the last year for which figures are available,
Lloyd's worldwide gross premiums were about 8.9 billion sterling.
About 574 million sterling came from Asia.
"We want to be here firstly to develop, protect and serve
better the lines (of business) we have, but also to take
advantage of the growth potential of some of the other lines of
business developing in the region," Prettejohn said.
Part of this development might include revising rules about
which kinds of brokers can do business in the market, he said.
Until now, only registered brokers meeting specific criteria
have been allowed to place business at Lloyd's.
"We are absolutely committed to making Lloyd's as accessible
to the local market as we can," said Prettejohn, adding it was
not the "objective of this operation to disturb traditional
relationships" with Lloyd's brokers.
"We would have to be very careful of the way in which we
sought to alter that relationship," he said.