More APAC companies buying D&O for home country exposure

The Asia-Pacific zone officer for the Chubb Group of Insurance Companies Jim Bronner (pictured) has told StrategicRISK that as a directors’ and officers’ (D&O) liability insurance insurance specialist, Chubb is well positioned to expand in the region.

“The Asia-Pacific region is an important market for us, and we’re one of the leading providers of D&O insurance in each of our markets,” he said.

“We’ve been writing D&O products in this region for almost 30 years, starting in Australia, so it’s a significant business for us.”

Bronner said that as Asia has grown economically, many of the exposures of corporates operating in the region have changed.

“In many cases the first buyers [of D&O] were those that had exposures in the US, but now we’re seeing a lot of buyers buying for indigenous reasons because exposures in the local markets are increasing,” he said.

“As a result, we are now seeing a company based in Japan or Singapore that may not have international operations or exposure buying D&O insurance for their home country exposure. It’s been a big change in the past five to eight years.”

A more stringent regulatory environment in the region is the main driver of this, Bronner adds.

“Regulatory compliance is increasing in the region around corporates and how they comply with local rules and regulations, including consumer regulations,” he said.

“In addition, local securities laws are putting a higher burden on directors and officers relative to their duties and responsibilities to their shareholders.”

New players

There are “many new players” in Asia-Pacific’s D&O space, Bronner points out.

“Ten years ago there may have been only three or four serious D&O markets in places like Singapore, Hong Kong and Australia,” he said.

“Now you can count 30 or 40 new players coming out into this part of the world, including many from the London and Bermuda markets.”

Bronner has been in Asia for two years, but has been with Chubb for three decades in both North and South America. Now based in Singapore, he is responsible for Chubb’s branches and subsidiaries throughout the region.

“We have operations in Australia, for example, which comprises more than half of our Asia-Pacific business, as well as Singapore where Shasi Gangadharan runs our South-East Asian operations,” he said.

“We also have operations in Thailand, Malaysia, Hong Kong, China, Korea, Taiwan and Japan.”

Chubb has had a presence in Australia for four decades, and in Singapore and Hong Kong for almost 30 years; together these operations currently make up about three-quarters of the insurer’s regional business.

“The newer markets for us are really China and Korea,” Bronner explained.

Recent experiences in South Korea have been very promising, such as being named an insurer of choice for member companies of the Korean Biotechnology Industry Organization (Korea BIO), the country’s biotechnology trade association. As part of this endorsement, Chubb will work with Korea BIO to create educational seminars for association members on converging technology, regulations, claim and litigation trends, and risk-management practices.

Core competency

Indeed, Chubb specialises in protecting life sciences firms – including biotechnology, medical device, pharmaceutical, dietary supplement and product development organisations – from property and liability exposures.

“It’s a core competency of Chubb globally and it’s an area that we’ve been developing throughout the region,” Bronner said.

“Development of solutions for the life sciences industry at various stages of research, product development, or the manufacture of devices – perhaps in China, Korea or South-East Asia, and then in many cases, exporting products or capabilities globally – provides insurance for both local manufacturing and export exposures.”

Bronner said that Chubb provided specialised products to meet the risk-transfer needs of corporates in niche sectors.

“We try to differentiate ourselves from the rest of the industry by delivering exceptional insurance products in specialised areas of focus that are important to risk managers in the customer segments that we serve,” he said.

“We target a variety of industry segments where we believe we can provide value, whether it be underwriting, loss control or claims expertise.

“This includes professional services firms, financial institutions, life sciences companies and information technology companies.”

Something that Bronner is certain of is the region’s potential for growth.

“One of the things that I found surprising in coming out to this part of the world is the low penetration rate of general insurance, as measured in terms of premium to GDP,” he said.

“You find that across the region, even in some of the more developed markets like Japan, Singapore and Hong Kong.

“That translates to a lot of opportunity for insurers in this part of the world. The economies are still growing and the insurance markets, while large, are still low in terms of purchase rate.

“This suggests that there’s still a lot of runway on growth opportunities from either new buyers of insurance products or current buyers to expand their risk-transfer appetite.”