Emerging countries in Asia are being transformed by rapid economic and social development – and so too are their domestic insurance markets. Each has its own characteristics and levels of sophistication.
Lloyd’s quite rightly views Asia as a group of diverse markets rather than a single Asian market. They should not be grouped too closely because some territories in the region, such as Vietnam, are still emerging, but other markets, such as Korea and Singapore, are fully developed, sophisticated and competitive.
The local practices and attitudes of territories have to be considered. “In all markets, having local underwriters that understand the way of doing business and having solid relationships to attract profitable business is key, ” Chaplin says.
In Hong Kong, for example, Lloyd’s coverholders enable underwriters to delegate authority to local specialists through strong relationships and networks. While in Singapore, Lloyd’s operates an underwriting platform, which suits the needs of the wholesale broking community. High-growth countries such as China are proving particularly enticing for foreign insurers, as markets benefit from increasing demand for products, from both business and consumers. But rate inadequacy across many classes and the still-developing judicial system require a degree of caution.
“Western insurers need to invest time and resources in understanding the Chinese market as it continues to grow in both size and sophistication, ” says Chaplin. “The country is as varied as Europe, and it is important that a long-term strategy is developed on how to access business in the different regions of China – requiring insurers to invest in local talent, and build their profile and relationships in the country.”
Lloyd’s is keen to promote the development of standards and talent in local insurance markets through its Vision 2025 initiative. It will also create a number of powerful hubs in certain major overseas markets and become more internationalized by having more overseas nationals in the market.
“The diversity of people as well as capital is important for Lloyd’s future development, ” adds Chaplin.
(Source: Lloyd’s of London website)