Inga Beale was named CEO of Lloyd's of London in January. The first woman appointed to the position, Ms. Beale has worked in the insurance sector since 1982. Previously the CEO of Canopius Group Ltd., she has held senior executive positions at several European insurers. Ms. Beale spoke recently with Business Insurance Editor Gavin Souter about the outlook for the market. Edited excerpts follow.
Q: Lloyd's has come out with modernization/expansion plans with Vision 2025. Is there anything in particular that you see as something you want to advance?
A: Vision 2025 is going in absolutely the right direction. We've already highlighted the key areas, and one of them is really to tap into the high-growth economies of the world, which Lloyd's traditionally hadn't been very strong in. So, while the U.S. remains very much our core market, we do see that people are going to be buying insurance for the first time in all sorts of other places, and we want to tap into that. We're trying to get primary insurance licenses in some of these markets. We're looking at countries like Mexico, Brazil, China, Turkey and other places around the world.
The other part is distribution. We are very much a brokered market, and we'll be looking at making Lloyd's generally easier to do business with. Alongside that is modernizing and streamlining how business can come into Lloyd's. I've been in this industry for over 30 years, and when I see how paper-based some of the processing that we do is, it sends a few shudders down my spine. We've really got to act on this to make sure that Lloyd's is keeping pace with the rest of the world.
Q: The Aon P.L.C./Berkshire Hathaway Inc. so-called sidecar facility caused quite a bit of controversy. Do you generally view those facilities as being positive or negative for Lloyd's?
A: These facilities have been around a long time, but there is quite an increased focus on them. And I can understand why the brokers are looking at this, because they're looking at streamlining and providing solutions for their clients. Regarding this particular transaction, it shows a huge confidence in the expertise in Lloyd's, which I think is fantastic. We have been carefully monitoring the impact on the rest of Lloyd's, and we've been able to measure that there's actually been a 3% increase in business into Lloyd's in general from Aon last year.
Q: What about some of the smaller, following syndicates? Do you think that the Aon facility or other facilities may be usurping their position?
A: Syndication is a fabulous way of getting capacity on new placements. And what Lloyd's can do is actually facilitate more and more of these consortia. So there's been quite a few consortia put together; and this provides a nice slug of capacity out to a client, but in a streamlined fashion where there's underwriting control but you have capacity from several underwriters.
Q: With more alternative sources of capital, such as pension funds, entering the market with potentially huge amounts of capital, how do you compete with them?
A: We are setting ourselves out to be providing an indemnity-based product rather than something that's based on some parameterization. So very much we want to stay to the heart of what we've been about. What we're trying to do is also tap into alternative capital. Now it may need a certain mechanism, but there are ways we can do it.
Q: You mentioned the U.S. is core for Lloyd's. Are there any changes that you would want to see in terms of the way Lloyd's obtains business or services business in the United States?
A: No. I think we're going to very much go along with our coverholder model, and we're looking to continue to grow. We've had success there. And in 2013, we did actually see growth from North America for Lloyd's overall. North America accounted for 43% of our premiums last year. So I think that was terrific. And we remain very much the No. 1 excess and surplus lines writer in the U.S., and of course we mustn't forget that we're also a sizable reinsurer.