Market Presentation: France. Guy-Antoine de La Rochefoucauld Country Manager. October >

Transcription

1 Market Presentation: France Guy-Antoine de La Rochefoucauld Country Manager October 010 >

2 About Lloyd s France > Setting the Scene > Review of Lloyd s in France 1 Content Reinsurance Market > Perceptions, Reality and what we can do Coverholders 3 > A Success Story

3 1 Lloyd s France 3

4 France >Setting the Scene ECONOMY ECONOMIC GROWTH UNEMPLOYMENT RATE GOVERNMENT BUDGET INTEREST RATES RETIREMENT AGE +1.5% (Estimate for 010) 9.7% (Down from 9.9 in Q1 010) CUTTING DEFICIT (In line with EU requirements) 1.75% (Euro Marginal Lending Facility) 60 to 6 (Plans to raise the retirement age) 1 INSURANCE INTEREST RATES ENVIRONMENT LEGAL & TAX ENVIRONMENT CORPORATE RESULTS RATING ENVIRONMENT GROWTH IMPULSES LOW RETURNS MOVING TARGET MODERATE TO GOOD IMPROVING HEALTH & SAVINGS (Low financial returns) (Changing local and international landscape) (Except for personal lines with nat cat losses) (Main improvements likely in personal lines) (Growing need for health and savings solutions) reinsurance INTEREST RATES ENVIRONMENT PLENTY OF CAPACITY OPPORTUNITIES REMAIN LOW RETURNS HIGH NICHE (Low financial returns) (Rates falling with no obvious catalysts for a re-rating) (Nat Cat, niche lines and Solvency II)

5 Lloyd s In France >Background 1 LLOYD S GROSS SIGNED PREMIUMS (GSP) Direct Reinsurance 53% 009 Lloyd s GSP EUR 0.5bn 47% Direct Reinsurance 1 First European Office (1947) All Classes of business* (*see for details) 3 Strong local stakeholders: - 7 Service Companies - 35 Coverholders - French Lloyd s Brokers SOURCE: Market Intelligence based on Gross Signed premiums; Xchanging (010) 010 KEY ACTIVITES 011 FOCUS: Developing Lloyd s Business 1 New Country Manager 1 Reinsurance Review of Lloyd s Business Coverholders 3 Improving Brand Image

6 Reinsurance Market 6

7 Reinsurance Market >Market Participants 1 3 REINSURERS DOMESTIC INTERNATIONAL (with some local presence) INTERNATIONAL (with no local presence) 1 Strong Domestic Market Strong Continental Players 3 Bermudan access DISTRIBUTION 1 Concentrated Market Few Reinsurance Brokers 3 London vs. Paris perceptions SOURCE: Turnover breakdown taken from: La Tribune de l'assurance, "Les 100 premiers courtiers francais en 009", (010); in million EUR Gras Savoye April Group Marsh AonBenfield Verspieren Siaci Saint Honore SPB CBP Groupe Henner Filhet-Allard Verlingue Diot Groupe Assu Top Broker by Turnover PROPERTY MARINE BENEFITS / MEDICAL MISCELLANEOUS LIFE Cabinet Besse

8 Reinsurance Market >Market Size Reinsurance Market Structure Reinsurance Market Survey (APREF)* TREATY 69% TREATY Market EUR.3bn* 31% NON-PROPORTIONAL (XOL) 1) Storm including Nat Cat ) Motor Accident / Liability 3) Fire 4) General Liability 5) Decennial Liability EUR 1.5bn+ 1% 7% NON-LIFE REINSURANCE Market EUR 6bn 59% NON-PROPORTIONAL (XOL) PROPORTIONAL (Quota Share) PROPORTIONAL (Quota Share) 1) Nat Cat (covered by state guarantee) ) Credit Guarantee 3) Engineering (All Risks / Construction) 4) Motor Accident / Liability EUR 700m+ 13% FACULTATIVE AVIATION & POOL 60% FACULTATIVE Market EUR 60m* 40% NON-PROPORTIONAL (XOL) 1) Fire ) General Liability 3) Aviation 4) Decennial Liability EUR 150m+ DIRECT ESTIMATES NON-APREF MEMBERS APREF MEMBERS NON-PROPORTIONAL (XOL) PROPORTIONAL (Quota Share) PROPORTIONAL (Quota Share) 1) Fire ) Engineering (All Risks / Construction) 3) Space EUR 100m+ Based on London & Paris Interviews, (May 010) * Note that figures are based on voluntary survey and may therefore be incomplete

9 Reinsurance Market >Lloyd s Appetite Lloyd s 009 Appetite Summary TREATY FACULTATIVE Accident & Health Personal Accident XL Medical Scheme Aviation Airline Aviation Liability XL Space Airline Space XOL 69% EUR 36m Facultative 1% Treaty 10% Liability Energy Per Risk Excess Energy Account XOL Professional Indemnity (E&O, D&O, etc.) Medical Malpractice Scheme Energy Liability Energy Construction Marine Cargo XOL War XOL Hull XOL Vessel shipbuilding Legal Liability Cargo Vessel War Yachts Based on London: Xchanging REG 58 (010) country of origin figures; see Appendix for details Property Agriculture & Hail (new for France) Property Cat XL NM Property Pecuniary Loss Whole Account XOL Per Risks XOL Property Large Property Risks Terrorism Contingency (events, etc.)

10 Reinsurance Market >Review PERCEPTION there are language & visibility barriers for doing more RI business LANGUAGE & VISIBILITY 1 Expensive translation of documents Lack of visible French-speaking U/W 1 KEY TO SUCCESS Develop a list of French speaking U/W & Brokers reality only few underwriters & RI brokers are known by the French Market Raise visibility for U/W & Brokers 3 Development of new French Lead U/W & French desks in Lloyd s Brokers 1 Little visibility in the French Market Relatively narrow Lloyd s Broker support

11 Reinsurance Market >Review PERCEPTION slow settlement of claims 1 Comparatively slow settlement CLAIMS 3 Leader / Follower role not well understood London and Lloyd s practices different to Continental Market KEY TO SUCCESS 1 Clear policy wordings essential reality Large claims are settled quick when contract and wordings are clear to all parties 1 Quick settlements when clarity of wordings and contract Road show of claims segmentation 3 Understand local law 4 Market needs to tackle speed for medium-sized claims 3 London and Lloyd s rules differ but that should not stop doing business Challenges remain with medium-sized claims

12 Reinsurance Market >Review PERCEPTION Lloyd s Subscription Model difficult to understand SUBSCRIPTION MODEL 1 Complicated model to understand Leader / Follower dynamics not well understood 3 Claims process delayed reality while unique to Lloyd s, Subscription Model is one of Lloyd s core strengths KEY TO SUCCESS 1 Clear explanations on Chain of Security Highlighting the competitive advantages 3 Road shows for cedants 1 Leads to competitive quotes Allows risks to be spread effectively 3 Chain Of Security provides security

13 Reinsurance Market >Proposed Actions 1 Create a Market Development Group > To build a committed group of market participants to tackle real & perceived barriers Development of a Market Appetite Matrix > To prioritise market intelligence & marketing efforts 3 Identify French speaking U/W & Brokers > To help cultivate long term opportunities for our market 4 Hold Cedant Road Shows / Class of Business Events > To lower perceived barriers & showcase expertise of our market! Understand that we need to work together > Learn lessons and build on successes

14 3 Coverholders 14

15 Bretagne Nord Pas de Lille Calais Haute Amiens Norm andie Picardie Châlon Metz Rouen Caen Basse Paris Lorraine Normandie Champagne - Ile de Strasbourg Ardenne Rennes France Alsace Pays de Orl é ans La Loire Dijon Besan çon Centre Franche - Bourgogne Nantes Comt é Poitiers Clermont - Poitou - Ferrand Charentes Limoges Lyon Limousin Auvergne Rhône -Alpes Bordeaux Aquitaine Montpellier Midi -Pyrénées PACA Monaco Toulouse Marseille Languedoc - Roussillon Coverholders >Where are we at? 3 LLOYD S GROSS SIGNED PREMIUMS (GSP)* % 009 Lloyd s GSP EUR 0.5bn 47% COVERHOLDERS 1 35 Coverholders Provide local access Direct Reinsurance Direct Reinsurance 3 Concentrated in Paris Area *SOURCE: Market Intelligence based on Gross Signed premiums; Xchanging (010) DIRECT BUSINESS* 009 KEY LINES 009 5% 48% Lloyd s GSP EUR 65m Property Aviation 011 KEY PRIORITIES General Liability Open Market Correspondent Coverholder Business Regions Speciality Lines

16 Coverholders>A Geographic Perspective 3 FRENCH WEST INDIES LEGEND PARIS RHONE-ALPES Eurl Tackling NO CURRENT BINDING AUTHORITY ACE European Group Assuaero Cabinet Lodde CURRENT BINDING AUTHORITY Aon SA MVRA Nord Pas de Calais Lille ART Assurance et Reassurance Technique Assurance & Capital Partners (ACP) PICARDIE Assurance et Audit - Cavalassur Bretagne Caen Basse Normandie Rennes Pays de La Loire Haute Amiens Normandie Rouen Picardie Paris Ile de France Orléans Châlon Champagne - Ardenne Dijon Metz Lorraine Strasbourg Alsace Besançon CAEG CAR Cabinet Courtage d'assurances et de Reassurances Cooper Gay France Etude et Realisation d'assurances SA Europe Assurances Paris POITOU-CHARENTES Cabinet Gerbault FRANCHE-COMTE EGERIS Assurances Nantes Poitiers Poitou- Charentes Bordeaux Centre Franche - Bourgogne Comté Clermont - Ferrand Limoges Lyon Limousin Auvergne Rhône-Alpes France Assurances Consultants (FAC) Gras Savoye HWI France International Business Solutions International SOS Services Sas PAYS DE LA LOIRE SABIRAP AQUITAINE GSAR Aquitaine Midi-Pyrénées Toulouse Montpellier PACA Monaco Marseille J Van Schrader & Cie SNC Legrand Limited BASSE NORMANDIE Le Centaure Corse Ajaccio Languedoc - Roussillon Marsh Martin & Boulart Underwriting Mobility Saint Honore PACA Assurances Chevalier GAMA Gestion d'assurances Maritimes MSI Assurances et Reassurancess Gras Savoye Sicoma SEGAP Nasco Karaoglan France Montmirail For an up to date list: Solly Azar Assurances SARL Euro-Conseil-Assurances Riviera Insurance Brokers l

17 Coverholders >Success Story 3 LLOYD S COVERHOLDERS 1 Important source of income Accessing smaller business lines 3 Strategic importance of this channel SOURCE: Lloyd s Strategy , KEY CONSIDERATIONS 1 Lloyd s difficult to access 3 Local market difficult to penetrate Lloyd s as leader (i.e. Sport Insurance etc.) 4 Bespoke solutions 1 19 Football clubs quoted in only months 5 have accepted (including two of the largest teams in France)

18 Coverholder >Success Story Points to overcome 3 1 Find enough capacity Include Life Policy 3 Lack of available French Wordings 4 No Medical Selection available How to Overcome 1 Create capacity independent of RI mkt. Combine Life & PA into single Binder 3 French Wording accepted by U/W >> A non-accessible niche market controlled 100% by Continental Reinsurance Players. New premium for Lloyd s built locally with the support of the Lloyd s market. Next Steps 1 Develop product for individual players 4 Build French Medical selection Create more Lloyd s Term Life Products

19 Coverholders>Proposed Actions Region Innovation 1 Develop Regional Coverholder 1 Respond to a market need Road show / Events Local expertise & relationships Quality 1 Clear & competitive wording 1 Understand who wants to build this channel in the region Improve Binder clause Explain the benefits of coverholders to local market 3 Contract Certainty 3 Regional Events / Education

20 Conclusion Lloyd s France looking at providing added value to the Lloyd s Market 1 Develop Reinsurance channel Developing regional Coverholders 3 Class of Business Events 4 Regional Events 5 Provision of enhanced market intelligence and soft information Guy-Antoine.deLaRochefoucauld@lloyds.com 0

21 Market Intelligence Products COMPARE COUNTRIES 1 Compare Countries provides high level statistics for the economy, insurance market and Lloyd's business to compare countries worldwide and by region. Heat map of key indicators Benchmarking tool Easy to use To be launched in November 010 > MARKET PRESENTATIONS 3 Market Presentations contain insights offered by Lloyd s Country Managers on opportunities and challenges for Lloyd's in their markets. Local intelligence Key opportunities & challenges Lloyd s activities > COUNTRY PROFILES Country Profiles are 5-page summaries of key economic, insurance and Lloyd s business for 39 individual territories. Summary fact sheets on 39 territories 1-page overview of insurance market 1-page guide to Lloyd s premiums and licence To be launched in November 010 > REGIONAL WATCH 4 Regional Watch is an interactive database for Managing Agents only which includes intelligence on key players, business classes and distribution. Interactive database for 70+ markets Class of Business trends for key markets Key players analysis for key markets >

22 Appendix Lloyd s 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 58 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: 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: 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 1st December 007 would be classified at 007 underwriting year of account but may not be processed by Xchanging until 008 and so be allocated to the 008 processing year 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 obtained in this document.

23 3