StrategicRISK talks exclusively to Lloyd’s and Beazley about the extension of the Lloyd’s construction consortium to Singapore
Head of Asia Pacific at Lloyd’s Asia Kent Chaplin (pictured) has told SR that the consortium, which has been extended to operate from the Lloyd’s Asia platform, provided “a simple and efficient way to access up to $166 million of highly-rated insurance capacity”.
Chaplin added that as the consortium retained “Lloyd’s unique strengths in the depth of expertise and knowledge of multiple specialist underwriters”, it would be a “gain for the construction industry in Asia”.
As in London, the Singapore consortium comprises syndicates managed by Beazley, Canopius, Hardy and Talbot.
Talking to SR shortly after the announcement of the consortium’s extension, Beazley’s regional underwriting manager, construction and engineering Byran Lee said that Singapore was now an established hub for construction insurance in Asia.
Lee said that the consortium would “assist brokers in the region to rapidly assemble large scale capacity from a single platform”.
“[It] marries together four syndicates with a huge amount of experience and in depth knowledge in the sector,” he said.
“This combined with Lloyd’s very strong financial security and its unique chain of security which provide the financial strength that backs all insurance policies written at Lloyd’s Asia, will create a valuable and attractive new alternative for the region’s largest construction projects.”
Beazley manages five Lloyd’s syndicates and, in 2013, underwrote gross premiums worldwide of $1,970.2 million.
Canopius is the global speciality insurance and reinsurance platform for NKSJ Holdings, Inc., an A+ rated company with $90bn total assets listed on the Tokyo Stock Exchange.
Hardy Underwriting Bermuda Limited is the holding company for the Hardy group of companies, which became part of the CNA group in 2012. Hardy manages Syndicate 382 at Lloyd’s.
Talbot is the Bermuda parent of a specialty insurance group, part of Validus, primarily operating within the Lloyd’s insurance market through Syndicate 1183.
Different stages of evolution
Earlier this year, Chaplin told SR that Asia was a massive and enormously complex region that needed to be considered “country by country”.
“The countries in the Asia-Pacific region are at different stages of evolution, not only economically but in terms of their insurance and reinsurance appetite, levels of expertise and buying behaviour,” he said.
Australia was a very important market for Lloyd’s, Chaplin said, “as are Japan, Hong Kong and Singapore”.
Organisations operating in these more mature and established markets generally had highly sophisticated risk management functions, he added.
“They’ve been using Lloyd’s in London for decades, in some cases centuries, and there’s a lot of loyalty there. We’ve built long-term relationships and our products have developed over the years to respond to the changing risk landscape,” he said.
“Lloyd’s features heavily in many of those countries’ risk management programs, either through reinsurance or through very specialist insurance products, such as professional liability, financial lines, large industrial construction and engineering risks, even products such as warranty and indemnity insurance.”
However, Chaplin reiterated, the ASEAN economies were growing quickly and “that’s where the insurance penetration will also be growing the fastest”.
“A lot of the growth is in the primary market, and alongside that it is the growth in industry, commercial property and urbanisation that’s increasing demand for specialist insurance and reinsurance,” he said.