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Lloyd’s cover to cover

Lloyd’s cover to cover. NAPSLO Symposium. What is Lloyd’s? What makes us unique? Lloyd’s in the U.S. Emerging Risks and Vision 2025. What is Lloyd’s?. The world’s leading specialist insurance market. A colorful history. 7.

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Lloyd’s cover to cover

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  1. Lloyd’s cover to cover NAPSLO Symposium

  2. What is Lloyd’s? What makes us unique? Lloyd’s in the U.S. Emerging Risks andVision 2025

  3. What is Lloyd’s?

  4. The world’s leading specialist insurance market

  5. A colorful history 7

  6. Lloyd’s coffee house first appeared in tower street in the 1680’s

  7. 1688 ships and cargos underwritten

  8. 1771 Lloyd’s becomes the property of the subscribers

  9. 1887 first non marine risk underwritten Late 1880’s first US risk underwritten

  10. 1906 San Francisco earthquake

  11. 1925Central Fund created 1920’s – 30’s Lloyd’s licensed in IL and KY 1939Lloyd’s American trust established

  12. 1940’sLloyd’s insures the stars 1950’sHurricanes Carol, Edna & Hazel 1960’s Apollo moon program

  13. A string of losses between 1988-92 threaten Lloyd’s future Piper Alpha Asbestosis Hurricane Hugo Hurricane Andrew Exxon Valdez European storms

  14. In the 21st century the Lloyd’s market is known for specialist Expertise

  15. How is Lloyd’s unique?

  16. Lloyd’s firsts Automobiles space flight Aviation Terrorism

  17. Appetite for unusual risks requiring innovative solutions

  18. Lloyd’s market structure CORPORATION OF LLOYD’S The Market Managing Agents Syndicates Distribution > Brokers > Coverholders Members > Corporate > Non-corporate Policyholders

  19. A dynamic and diverse marketplace57 Lloyd’s managing agents88 syndicates

  20. Individual members (unlimited liability), Individual members 3% Worldwide (limited liability), insurance industry, 9% 22% UK insurance Bermudian industry and other insurance industry, corporate 10% 39% US insurance industry, 17% Lloyd’s syndicates - backed by some of the best known names in global insurance 22

  21. LLOYD’S FINANCIAL STRENGTH Our Chain of Securityand independent ratings

  22. Lloyd’s Chain of Security First LinkSYNDICATE ASSETS$64.03 Billion Before writing business, a syndicatemust put up funds to cover their own share of claims. These funds are the first “port of call” when paying policyholder claims.

  23. Lloyd’s Chain of Security Second LinkMEMBERS’ FUNDS AT LLOYD’S$23.51 Billion Each member (corporate or individual) must provide sufficient capital to support their underwriting. These funds are held in trust for the benefit of policyholders and used only if the syndicate assets have been exhausted.

  24. Lloyd’s Chain of Security Third LinkLLOYD’S CENTRAL ASSETS $4.81 Billion The Central Fund is available at the discretion of the Council of Lloyd’s to meet any valid claim that cannot be met by the resources of any member.

  25. INDEPENDENTLY ASSESSED In the eyes of leading ratings agencies,Lloyd’s is viewed as enjoying robust capital reserves: • Standard and Poor’s: ‘A+’ (strong) • Fitch Ratings: ‘A+’ (strong) • A.M.Best: ‘A’ (excellent) ` Lloyd’s Annual Report 2011

  26. Global reach 28

  27. Lloyd’s total business by region UK 18% Europe 16% U.S. & Canada 41% 10% 2010 9 % 2009 8% 2008 7% 2007 US & Canada 43% 2010 45% 2009 46% 2008 49% 2007 Central Asia & AsiaPacific Rest of 12% the World 5% Other Americas 8% Other Americas 7% 2010 6% 2009 5% 2008 4% 2007 Europe + UK 16% + 18% = 34% 2011 16% + 20% = 36% 2010 16% + 20% = 36% 2009 16% + 22% = 38% 2008 14% + 24% = 38% 2007

  28. Lloyd’s in the U.S. 30

  29. Placing business with Lloyd’s from the U.S. 2012 Illinois (since 1927) Kentucky (since 1937) USVI (since 1971) Licensed 2.75% 49 states Ranked #1 surplus lines insurer Surplus Lines 8% Exempt /Non-Regulated All 50 states 4% Reinsurance All 50 states Ranked #2 in US 3.5%

  30. Lloyd’s Total US Premium2011 2011 Direct vs RI 2011 Methods of Distribution US$ 12.1bn US$ 12.1bn $12.1 billion

  31. class of business premium breakdown (Direct and RI) 2011 Property (D&F) 2% Property Treaty 1% 3% 5% Casualty 30% 9% Marine Energy 10% Accident & Health Aviation 17% Overseas Motor 24% Casualty Treaty USD 12.1bn Source: Market Intelligence calculations based on Xchanging report LEG 720 - REG 258

  32. Lloyd’s > Top 10 States (E&S Premium) 1200 1100 1000 900 800 700 600 500 400 300 200 100 0 Texas California Florida New York Louisiana New Jersey Georgia 3 Lloyd’s share of the E&S market in Texas, Louisiana, Georgia, Virginia and Florida ranges from 20 – 31%. Catastrophe capacity provided by Lloyd’s fills a critical need in these states. 2011 Lloyd’s Market Share of State Premium 31% 17% 20% 11% 25% 18% 23% 20% 20% 14% 21% Excludes ReinsuranceGSP stands for Gross Signed Premiums as registered by the US reporting system in 2012Source: Market Intelligence calculations based US Reporting system and SNL Financial 2011 GSP ( USD mn) Property Energy Liability Prop + Liab Massachusetts South Carolina Pennsylvania Virginia Property Other Liability General Liability Pecuniary Loss Aviation Marine & Energy PA & Health Motor

  33. Insurance Market > Market Players 3 2011 E&S MARKET TOP PLAYERS* 2011 REINSURANCE MARKET TOP PLAYERS* $m $m SOURCE: SNL Financial 2012 and Lloyd’s US Reporting System SOURCE: RAA Reinsurance Underwriting Reports

  34. Lloyd’s America 36

  35. Lloyd’s America regional structure Pat Talley Central Regional Director Frankfort, KY/ Chicago Locations Hank Watkins President, NA New York Kiran Bhovan NA Market Dev. London Joseph Gunset General Counsel, LA New York Atlanta, GA 1 Boston, MA 2 Chicago, IL 3 19 19 5 5 Frankfort, KY - - 4 4 4 13 13 Los Angeles, CA 7 7 5 5 5 Glenn Dorr Northeast Regional Director Boston 23 23 5 5 2 39 39 1 1 New York, NY - - 6 23 23 14 14 3 6 U.S. Virgin Islands 28 28 7 4 4 65 65 3 3 11 11 64 64 15 15 10 10 4 1 1 15 15 11 11 9 9 15 15 5 6 6 23 23 Rodney Smith Southeast Regional Director Atlanta 22 22 1 11 11 16 16 8 8 39 39 10 10 24 24 3 3 6 6 11 11 Tony Joseph Western Regional Director Los Angeles 34 34 2 2 - - Hank Feuerzeig Lloyd's Attorney in Fact US Virgin Islands 7

  36. Lloyd’s America - 2013 objectives • Increase understanding about Lloyd’s by facilitating access to the market amongst the current/ future U.S. distribution networks and building stronger relationships. • Work with managing agents and brokers to establish/ maintain mutually productive and active engagement with key industry groups, supporting their business development activities. Groups include the following associations plus broker networks: • Ensure a well-informed Lloyd’s profile is presented in the US. • Maintain the markets ability to access business through effective and productive regulatory relationships. • Ensure US operations are cost effective and efficient.

  37. DRIVING THE DEBATE ON EMERGING RISKS

  38. Lloyd’s defines an emerging risk as… “an issue that is perceived to be potentially significant but which may not be fully understood or allowed for in insurance terms & conditions, pricing reserving or capital setting”.

  39. Emerging risks at Lloyd’s • Regular interaction with underwriters and brokers allows Lloyd’s to ensure the market is aware of potentially significant emerging risks • A variety of methods are used to track, monitor and analyse emerging risks • Horizon scanning • Quarterly meeting of Lloyd’s market experts • Relationships with academic and other research organizations • Research reports • Visit www.lloyds.com/emergingrisks

  40. Emerging Risk research reports • Microinsurance • Drilling in Extreme Environments • Arctic Opening • Climate Change and Security • Managing Digital Risk • Space Weather • Lloyd’s Risk Index • Managing Natural Catastrophes in the US • Behaviour • Electromagnetic Radiation • Forecasting risk • Flood • lloyds.com/emergingrisks

  41. New risks provide new opportunities Primary class of business in 1680’s Classes of business in 2011 Reinsurance38% Property21% Casualty18% Marine8% Energy7% Motor5% Aviation3%

  42. Lloyd’sVision 2025To be the global centre for specialist insurance and reinsurance

  43. Lloyd’s Vision 2025 • Growing our premium income from established markets in line with their economic growth with greater growth in new markets. • A more diversified capital base, with a greater contribution from high growth economies. • A truly internationalizedunderwriting community. • A broker market, utilizing brokers’ international networks. • Powerful oversees hubsin certain major oversees markets.

  44. Thank you lloyds.com/america @lloydsoflondon facebook.com/lloyds mark.rector@lloyds.com @linktolloyds 46

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