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Member, Beacon International Group, Ltd.
MONTE CARLO, Monaco—Lloyd’s of London is restructuring its direct Japanese platform as part of a broader effort to grow its Asian business, its chairman said at the Rendez-Vous de Septembre reinsurance gathering.
“In a few years, Asia will be a much more significant part of our business worldwide,” Lord Peter Levene said in an interview Monday in Monte Carlo, Monaco.
Lloyds, which writes direct insurance and reinsurance in Japan through Lloyds Japan Inc., currently has a limited number of syndicates participating via a binding authority arrangement with coverholders, Lloyds said.
A coverholder is a firm that is authorized by a managing agent—through what is called a ‘binding authority’—to enter into insurance contracts of behalf of the managing agent, according to Lloyd’s.
The new model involves transforming Lloyd’s Japan Inc. into a flexible, open platform, accessible to the entire Lloyd’s market, Lloyds said.
The new structure will give managing agents several options for writing direct business in Japan including: via the existing general binding authority; via a binding authority operated by a specific team established within Lloyd's Japan—also known as the joint underwriting services team—who will accept risks on underwriters’ behalf; or by managing agents setting up their own dedicated underwriting division, or “DUD,” with their own staff located within Lloyd's Japan, Lloyds said.
“We think it will encourage more participation and build a platform for growth,” Lord Levene said.
Lloyd’s currently has three platforms in the Asia Pacific region—Singapore, China and Japan. Together, they comprise roughly 8% of Lloyd’s worldwide revenues.
In China, where Lloyd’s recently launched a platform via Lloyd’s China Reinsurance Co. Ltd., Lord Levene said that “it will take a few years, but with the second-largest economy in the world, we certainly want to be there.”