Coverholders. Market Access Study. Capability Analysis. International Markets. Market Intelligence. April 2010 FOR MANAGING AGENTS AND BROKERS

Transcription

1 Disclaimer Coverholders Market Access Study Capability Analysis International Markets Market Intelligence April 200 FOR MANAGING AGENTS AND BROKERS

2 Lloyd s Capability Analysis > The Model > Country Categories > Coverholders ESTABLISHED NEW NON-ESTABLISHED

3 Lloyd's Capability Analysis > The Model MODEL SUMMARY Financial Institutions Directors & Officers Overseas motor War 2 Airline/ general aviation (hull) Medical malpractice Professional Indemnity Space NM general liability (direct) Contingency/ other pecuniary Pre-defined Criteria of Matrix Accident & Health (direct) 5 Property (direct & facultative) Cargo Medical Expenses Financial Guarantee X axis Growth rank: Business classes are ranked according to their Compound Annual Growth Rate (CAGR) calculated for the period. Business class with the rank had the highest growth rate, whereas business classes with the rank 25 or above had the lowest or negative growth rate during the period. Y axis Size rank: Business classes are ranked according to 2008 revenues. Business class with the rank was the largest in 2008 in terms gross written premiums, whereas business classes with the rank 25 or above were the smallest in the same year. 3 Fine Art Livestock & Bloodstock SOURCE: Xchanging, REG 258, (2009); please note data limitations as described in Appendix Marine Liability Airline/ general aviation (liabs) Energy Offshore Terrorism Jewellers Marine Hull GROWTH RANK 3 4 SIZE RANK 3 Engineering Political Risks/ contract frustration HIGH GROWTH / HIGH VOLUME Business classes that generate high revenues for Lloyd s. Due to historically high growth rate these business classes also have the highest potential for the future revenue development. 2 Low GROWTH / high VOLUME High volume business classes that have been growing at a slower pace or have been contracting. However, these are important classes as they still provide high revenue streams for Lloyd s. 3 High GROWTH / low VOLUME Business development opportunities within the sector have to be evaluated with great care, as some low volume classes, carrying extreme growth rates, grew from nil revenue level during last 6 years, and therefore might not reflect the future growth potential. 4 Low GROWTH / low VOLUME Lloyd s business classes that generate small revenues now and have low growth potential in the future. The sector has the lowest new business development potential.

4 European Distribution > Country Categories CATEGORISATION For the purpose of the further analysis, countries in Europe (excluding UK) are grouped in three categories according to: Lloyd s revenues generated per country, License type, Length of Lloyd s Office establishment. ESTABLISHED NEW NON-ESTABLISHED France Italy Germany Netherlands Switzerland Ireland Greece Denmark Belgium Channel Islands Cyprus Gibraltar Malta Norway Spain Sweden Austria Portugal Poland Russia Turkey Luxembourg Finland Azerbaijan Romania 4 SOURCE: Xchanging, REG 258, (2009); please note data limitations as described in Appendix; Countries generating < GBP 0m in annual GWP were ignored in this study

5 Lloyd's Capability Analysis > The Matrix 34 ESTABLISHED SIZE RANK Property (direct & facultative) Professional Indemnity Accident & Health (direct) 4 Medical malpractice Overseas motor Marine Hull 7 Directors & Officers Jewellers 0 NM general liability (direct) Marine Liability 3 Contingency/ other pecuniary UK motor 22 Engineering Employers liability 25 War Medical Expenses 28 Financial Institutions 3 Legal expenses 34 6 COVERHOLDER Cargo Fine Art Livestock & Bloodstock Term life GROWTH RANK Airline/ general aviation (hull) Terrorism Financial Guarantee Airline/ general aviation (liabs) Energy Onshore Space Aviation products/ airport liabilities Property cat XL Political Risks/ contract frustration Specie Energy Offshore Property pro rata KEY MESSAGES For Established Markets, Cargo, Fine Art, Professional Indemnity as well as Term Life tend to be the classes of business with high growth / high volume business for Lloyd s via the Coverholder channel. Target Business Classes for this Segment Cargo Fine Art Professional Indemnity Term life 5 Accident & Health Property Livestock & Bloodstock Airline / General Aviation (Hull) Terrorism Directors & Officers Marine Hull Jewellers SOURCE: Xchanging, REG 258, (2009); please note data limitations as described in Appendix SEE, Categorisation for definition of Established Markets

6 Lloyd's Capability Analysis > The Matrix NEW SIZE RANK Property (direct & facultative) Professional Indemnity Marine Hull Accident & Health (direct) 5 Overseas motor Cargo Jewellers Fine Art NM general liability (direct) 9 Contingency/ other pecuniary Marine Liability Livestock & Bloodstock Medical malpractice Directors & Officers Financial Institutions Space Employers liability 7 COVERHOLDER Medical Expenses Engineering 5 Airline/ general aviation (hull) Terrorism GROWTH RANK Energy Onshore War 2 Airline/ general aviation (liabs) Energy Offshore Aviation products/ airport liabilities 25 Legal expenses Financial Guarantee KEY MESSAGES For New Markets, Cargo, Marine Hull, Professional Indemnity tend to be the classes of business with high growth / high volume business for Lloyd s via the Coverholder channel. Term life 29 Target Business Classes for this Segment Cargo Marine Hull Property Professional Indemnity 6 Non-Marine General Liability Fine Art Medical Expenses Contingency / Other Pecuniary Jewellers Livestock & Bloodstock Accident & Health Marine Liability SOURCE: Xchanging, REG 258, (2009); please note data limitations as described in Appendix SEE, Categorisation for definition of New Markets

7 Lloyd's Capability Analysis > The Matrix 25 NON-ESTABLISHED Marine Hull Financial Institutions Directors & Officers Overseas motor 7 2 War Airline/ general aviation (hull) Medical malpractice Professional Indemnity Space NM general liability (direct) 7 Contingency/ other pecuniary SIZE RANK Accident & Health (direct) 5 Property (direct & facultative) Cargo Medical Expenses Target Business Classes for this Segment Marine Liability Accident & Health Property Terrorism Fine Art Space Cargo Jewellers Jewellers COVERHOLDER Fine Art Livestock & Bloodstock Financial Guarantee Marine Liability Airline/ general aviation (liabs) SOURCE: Xchanging, REG 258, (2009); please note data limitations as described in Appendix Terrorism GROWTH RANK Energy Offshore Engineering Political Risks/ contract frustration KEY MESSAGES For Non- Established Markets, Marine Liability, Accident & Health, Property well as Terrorism tend to be the classes of business with high growth / high volume business for Lloyd s via the Coverholder channel. SEE, Categorisation for definition of Non-Established Markets

8 2 About this Study > Objectives > Output > Methodology

9 About This Study > Objectives OBJECTIVES The aim of the Market Access Study was to help maximise opportunities for Lloyd s business in markets where Lloyd s is not well established. While the Lloyd s brand is well known and respected in the majority of developing markets, awareness not always transforms into business opportunities. The underlying methodology and research approach of this study has been developed through a case study on coverholder opportunities (only) in Poland. 9

10 About This Study > Output OUTPUT The study revealed six high growth business classes generating the largest revenues for Lloyd s from coverholder business for the category of new markets. More in depth analysis was conducted on those business classes from a coverholder perspective only in Poland. This summary of this analysis has been shared with Managing Agents via Regional Watch - Poland. > Managing Agents have access to Regional Watch Poland at: > > Poland Managing Agent Password can be requested from: marketintelligence@lloyds.com 0

11 About This Study > Methodology METHODOLOGY Understanding Lloyd s market In order to fulfil the objectives of the project, the central stage of the project has covered an understanding of Lloyd s, its strengths, capabilities, unique value proposition, needs of managing agents and brokers, as well as coverholder business strategies. Polish market study In order to understand characteristics of an emerging market in the Lloyd s context, a close working relationship was formed with the Lloyd s Country Manager in Poland, Witold Janusz. Along internal and external data collection, local market players were interviewed, in order to assess market sophistication and maturity as well as its business fit with Lloyd s unique selling points (USPs).

12 3 Appendix > Data Limitations

13 Appendix > Data Limitations DATA LIMITATIONS Please note the information contained in this document is based upon data collected from Xchanging and may be incomplete for some classes of business; for instance a substantial figure, which is missing from the REG 258 data set is comprised of UK Motor, which is not processed by Xchanging. GROSS PREMIUMS: Original and additional inward premiums, plus any amount in respect of administration fees or policy expenses remitted with a premium but before the deduction of outward reinsurance premiums. Lloyd s figures are based on gross written premiums based on figures processed by Xchanging by processing year and country of origin. COUNTRY OF ORIGIN: This denotes the country from where demand for the insurance / reinsurance emanates; i.e. the coverholder or policyholder, irrespective of the country to which the risk is classified for regulatory reporting purposes. PROCESSING YEAR: Data limitations: This relates to the calendar year in which the premium, additional or return premium is processed by Xchanging, irrespective of the actual underwriting year of account of the risks (which is determined by the inception date of each risk). Example: A policy holder in the UK insuring a holiday home in France would be classified as a UK risk by Country Of Origin, but French for regulatory reporting purposes. Similarly a risk incepting on st December 2007 would be classified at 2007 underwriting year of account but may not be processed by Xchanging until 2008 and so be allocated to the 2008 processing year. 3

14 Disclaimer "This document is intended for general information purposes only. Whilst all care has been taken to ensure the accuracy of the information Lloyd's does not accept any responsibility for any errors or omissions. Lloyd's does not accept any responsibility or liability for any loss to any person acting or refraining from action as a result of, but not limited to, any statement, fact, figure, expression of opinion or belief contained in this document".

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