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Lloyd's of London, soon to celebrate its 319th birthday, is the world's oldest insurance marketplace and has seen a lot of change in how insurance is transacted. Wendy Baker, president of Lloyd's America Inc. in New York, offers her insights on how Lloyd's itself is changing to meet the needs of its underwriters, brokers and policyholders.
Q: The United States is an important market to Lloyd's. How is Lloyd's making access to the marketplace easier?
A: It's a big market for us. About 40% of our business is from the United States, which is over $11 billion. We've grown dramatically in the last eight or nine years. Access does change. Distribution channels change over time. Buying habits of our customers change. What we're trying to do is make access easier. We're trying to make it easier for a U.S. broker to become a Lloyd's broker so that they can access the market. Lloyd's is a quirky organization, and it's an Act of Parliament that controls a majority of the regulations within the market.
Under that Act of Parliament, you have to be a Lloyd's broker to access the market. Rather than trying to change that law, it's easier to change what it takes to become a Lloyd's broker.
So we're trying to streamline that process, make it a quicker process and have some brokers that we're interested in and they're interested in placing in London have an easier time getting to us.
We're very interested in how to make access easier for clients around the world.
Q: Several of the largest underwriting companies at Lloyd's have established presences in the United States and Bermuda to get closer to the business they're writing. How do you see that evolving?
A: Evolving is the right word. It's an evolution, not a revolution of any type. Within Lloyd's, our organizations have grown to a substantial size, and they see access, maybe some different distribution channels, some different types of business that doesn't make it across the Atlantic, that they would like to have the ability to underwrite. We need to make sure that we provide the best platform in the world, and that is our aim. But in some cases, people will go elsewhere because they need another distribution channel that we don't offer.
We need to work harder at our end, but we also have to understand that there is an evolution and people will go to different parts of the world to get business that is just not coming there for a multitude of reasons.
Q: How is Lloyd's harnessing technology to make the placement process easier?
A: A good example of that is the new office we opened in Shanghai, which is virtually paperless. We have a number of syndicates operating out of that market. They are underwriting business in Shanghai and it is sent right in, without paper, into London, where it's processed, booked, etc. within the Lloyd's building. We do have the ability to do it.
This new office is certainly an example of the fact that you can place business at Lloyd's both ways: You can do it locally, without paper locally, or you can do it in the Lloyd's building when you really need to sit down and talk with somebody about a risk that needs a lot of explanation, or there's a relationship there or an issue or problem with the risk. You have to be able to cover both sides of the spectrum.