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Lloyd's of London recognizes the growth potential of the Central and Eastern European insurance market and is attempting to raise its profile in the region. Lord Peter Levene, Lloyd's chairman, recently visited Austria and Poland to meet representatives from those insurance markets. While in Vienna, Austria he sat down with BIE to talk about Lloyd's plans for the region.
Q: What is the purpose of your trip to Austria and Poland?
A: Lloyd's business is spread right across the world and always has been. The vast majority of our business is outside of the United Kingdom. The largest single market is in the United States. But when we look at what we're doing in Europe, I think that we are punching below our weight, and certainly in the United States, I think we punch above our weight. As you will know, we recently established ourselves in China; we spent a lot of time looking at areas like that. But much closer to home in Europe, we think there is a significant chance to grow our business because, although it has done pretty well recently in terms of the levels of growth in each country, the absolute numbers are not as big as they should be. So we are spending time now looking at different countriesthe major western European countries and then the Central and East European countries, where our penetration has been low. Certainly, I haven't been to Austria as chairman of Lloyd's, and this is a place which is a pretty sophisticated insurance market and it is one we ought to look at.
Q: Why has Lloyd's looked further afield to markets like China and India before European markets such as Austria, Poland and other Eastern European countries?
A: It is not that we haven't looked in Europe; we have. And we have an established business in Europe in most countries. Our view now is that it should be larger. But in places, particularly like China, where we had no establishment, we've now got ourselves inwe have an operation going there. Clearly, China is a huge economy, but there aren't that many Chinas around, and so we now need to look closer to homeplaces not very far away, where there is a well-established market, but where our market share is much lower than what we would like it to be.
Q: So what specifically would Lloyd's be offering here in Austria and other Eastern European countries?
A: Well, really it is more of the same. We do operate here, we do have some business here; it is not enormous. We think that the Austrian economy is doing very well. I am going tomorrow to Poland. We think Poland is a very interesting opportunity. We are one of the largest insurers and reinsurers in the world, so I think it is only natural that we should look to countries where we have a relatively modest performance to improve them. But there are no Austria-specific products, if you like. We just think that bearing in mind the size of the Austrian economy, which is certainly not tiny, we should be doing more business here than we are at the moment.
Q: Can you say what proportion of Lloyd's business currently is derived from Eastern Europe?
A: One percent.
Q: If you're at 1% of business at the moment, where would you like to see that reach?
A: Higher. I am not making guesses like that, but what it does mean is that there is plenty of scope.
Q: Do you plan any new representative offices in the region?
A: That remains to be seen. I mean not directly at this stage, but we don't have a fixed mind on any of these things. If we find that it would be important, worthwhile and productive to do that, then that is something we would certainly look at.
Q. But are you talking specifically Austria and Poland for new markets for Lloyd's, or is this a base of operations for all of Central and Eastern Europe?
A: I think that is a little premature, though clearly it is a very good base, but Austria is a country where we do need to do more business. Poland is a large economy now, where we have traditionally not been one of the front runners. We want to build up our reputation and get people to understand what Lloyd's is about, so they can come to us when they have a requirement.
Q: And how about moving even further east to Russia. Are you already in Russia?
A: We do some business in Russia, but predominantly only from the outside in aviation and fields like that. The Russian economy has gone through an extraordinary transformation in the last 10 years, and I would not be surprised if in the future we do not find more opportunities in Russia.