© Lloyd’s 2012
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LLOYD’S – Local Global Insurer
Adrian Humphreys Managing Director - Lloyd’s Australia
February 2014
© Lloyd’s 2012
AG
EN
DA
1 Disneyland for brokers
Can Lloyd’s pay?
Policies in and claims out
Are Lloyd’s local?
Current market
2
3
4
5
Australia vs London 6
© Lloyd’s 2012
1688: Edward Lloyd’s coffee house is first mentioned in the London Gazette. It
is frequented by ship owners and merchants seeking shipping news, which
attracted those providing insurance for ships and cargo – the underwriters
325 Years of Lloyd’s
© Lloyd’s 2012
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Lloyd’s modern Market Structure
Australian Broker
Direct
Reinsurance
54
Managing
Agents
Management
89
Syndicates
Underwriting
BUSINESS FLOW CAPITAL PROVISION
Members
Agents
Members
• Corporate
• Individual
CORPORATION OF LLOYD’S
191
Lloyd’s
Brokers
Service
Companies*
Coverholder
Source: Lloyd’s Relationship
Management, January 2013. Includes
11 Special Purpose syndicates
© Lloyd’s 2012
“Insurance is a promise to pay”, understanding the security behind your policies is vital when securing your clients future.
LLOYD’S > Chain of security
© Lloyd’s 2012
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Financial results (in USD million)
Gross written premiums 37,563 40,500
Combined ratio 106.8% 91.1%
Investment return 1,528 2,084
(Loss) / Profit before tax (800) 4,517
Return on capital (pre-tax) (2.8)% 15%
Source: Lloyd’s pro forma financial statements, 30 June 2012
Dec 2011 Dec 2012
Fitch Ratings
A+ (strong)
Standard & Poor’s
A+ (strong)
A+
A
A.M. Best
A (excellent)
Market ratings re-
affirmed and apply to
each policy issued by
lloyd’s
Disciplined underwriting with modest rate
improvements in 2012
© Lloyd’s 2012
Lloyd’s strengthened position is recognised by the rating agencies
Core strength > Security rating
Sources: Source: AM Best, Fitch and S&P, 2009
Upgraded
Unchanged
Downgraded
Negative outlook
S&P rating actions since January 2002 - Lloyd’s IFS rating has
been upgraded to A+, despite downgrades in the wider market
© Lloyd’s 2012
Routes to the Lloyd’s market
Lloyd’s Business > Market Access
Source: Lloyd’s Australia, (2013)
Australian
Broker
(Direct or
Re-insurance)
57
Insurance
Companies
Management
88
Syndicates
Underwriting
London Broker
Underwriting
Agency
Po
licyh
old
er
Service
Companies
Arch
Beazley
Catlin
Sportscover
Ironshore
Newline
Starr
Acct &
Settlement Xchanging
© Lloyd’s 2012
Routes to the Lloyd’s market
Lloyd’s Business > Paying claims
Australian
Broker
(Direct or
Re-insurance)
57
Insurance
Companies
Management
88
Syndicates
Underwriting
Lloyd’s Broker
Underwriting
Agency or TPA
Po
lic
yh
old
er
Source: Lloyd’s Australia, (2013)
Service
Companies
Acct &
Settlement Xchanging
Local claims
handling
ECF and
segmentation
Arch
Beazley
Catlin
Sportscover
Ironshore
Newline
Starr
© Lloyd’s 2012
LLOYD’S > Claims
Nine out of 10 Nat Cat and all in the last eight years
Year Event US$ bn
2005 Cyclone ‘KRW’ – US & Gulf of Mexico 8.0
2001 Terrorism WTC – US 3.0
2012 Superstorm Sandy 2.5
2011 Thailand Floods 2.2
2008 Cyclone ‘Ike’ – US & Gulf of Mexico 2.1
2011 Japan Earthquake & Tsunami 1.95
2005 Cyclone ‘Rita’ – US & Gulf of Mexico 1.5
2010 Chile Earthquake 1.4
2011 New Zealand Earthquake 1.4
2005 Cyclone ‘Wilma’ – US 1.0
2010 Australian floods 0.4
Source: Lloyd’s Australia, (2013)
© Lloyd’s 2012
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US major claims events > dominate 2012
Source: Lloyd’s pro forma basis. Indexed to December 2012
Claims in foreign currency translated at the exchange rate prevailing at the date of loss
2,290
4,703
1,816
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
£m
LLOYD’S MAJOR CLAIMS: NET ULTIMATE CLAIMS
US Non-US
15 YEAR AVERAGE
£1,436m
© Lloyd’s 2012
Lloyd’s is ranked as 5th in terms of Gross Signed Premium and
Australia is 3rd largest market for Lloyd’s globally
Lloyd’s is local
• Licenced General Insurer
• Principal Strategic Partner of UAC
• Board member: Insurance Council of
Australia
• Insurance Code of Practice
• Insurance Advisory Committee (FSL)
Aon 2012 Survey (350 Companies) Lloyd’s ranked:
• Top insurer for >$1bn revenue
companies
(up 7 places), takes top spot from Allianz
• 2nd for mid-sized ($100m - $1bn) companies
(up 4 places)
• 3rd for smaller companies, (up 3 places)
LLOYD’S Australia > key facts
Source: Aon Survey and J.P. Morgan General Insurance Industry Survey (2012); APRA, (2012); Company Annual Reports, (2013); Exchange rates as per Appendix
2012 MARKET PLAYERS: TOP 7 General Insurers
(Excluding global business; *Includes subsidiaries)
Others*
2012 Non Life
Insurance premiums
US$ 40.1bn GWP
(US$ 29.8bn NWP)
**On a country of
origin basis. May differ
from APRA statistics.
Please see Appendix
for further details
1.2
1.3
2.0**
3.2
4.6
6.6*
6.8*
4.6
© Lloyd’s 2012
Property Treaty
Source: Market Intelligence calculation on Xchanging figures. Rates of exchange calculated as per Appendix
2008 – 2011 LLOYD’S PREMIUMS: BY CLASS
Overseas Motor
PA & Health
Marine
Aviation
Energy
Gross Signed Premiums in: million US$
Lloyd’s premiums are dominated by Property and Liability classes.
Accident & Health experienced the most significant % growth during 2011, more than doubling to US$ 242m
Lloyd’s data is based on Xchanging “REG 258”, (2010); unaudited figures based on country of origin and processing by calendar year; please refer to Appendix for detailed summary of Lloyd’s Data Limitations. !
Casualty Treaty
Casualty
Property (D&F)
56.5 70.6 85.5 112.7 241.0
449.2 455.2 505.1
629.4
774.2
45.4 64.3
50.5
50.9
66.0
49.0 60.4
58.3
79.7
86.3
216.9
239.5 231.5
302.6
349.9
78.6
98.3
126.8
158.1
285.2
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2007 2008 2009 2010 2011
© Lloyd’s 2012
Australian Territorial Extensions
SOURCE: Lloyd’s Australia, (March 2012)
Lloyd’s > Agency Overview
2007 – 2011 Number of Binder by Class
Lloyd’s data is based on Xchanging “REG 258”, (2011); unaudited figures based on country of origin and processing by calendar year; please refer to Appendix for detailed summary of Lloyd’s Data Limitations.
SOURCE: Lloyd’s, Delegated Authority, (2012)
244
250
271
230 240 250 260 270 280
2009
2010
2011
2007 2008 2009 2010 2011
Aviation 0 0 0 0 3
Casualty 98 134 202 206 189
Energy 4 4 4 2 8
Marine 24 29 41 28 35
Motor 9 8 13 13 19
PA & Health 23 29 40 26 57
Property 120 129 132 136 121
Grand Total 278 333 432 422 432
2009-2012 Total GSP for U/w agencies
SOURCE: Market Intelligence based on Gross Signed premiums; Xchanging (2012)
79
0
25
50
75
100
2009 2010 2011 2012
99 85
424
614
865
0
300
600
900
2009 2010 2011
107
817
2012
2009-2012 Total # of Individual U/w agencies
SOURCE: Lloyd’s, Delegated Authority, (2012)
© Lloyd’s 2012
LLOYD’S AUSTRALIA > Underwriting Agencies
Source: Lloyd’s Delegated Authority, (February 2013)
Number of Coverholders
Number of active coverholders by region
0 64
Number of Binders
Number of active binders by region
0 140
149 Total Number of Coverholders 304 Total Number of Binders
64
35
26
9
14
0
1
140
74
45
14
26
0
5
© Lloyd’s 2012
LLOYD’S AUSTRALIA > Underwriting Agencies
AFA
Affinity Risk Partners Brokers
AIS Insurance Brokers
Altiora Insurance Solutions
Aon Risk Services
Arch Underwriting at Lloyd’s
Asia Mideast Insurance & Reins.
ASR Underwriting Agencies
ATC Insurance Solutions
Austagencies
Australian Income Protection
Australian Insurance Agency
Pool
Australian Reinsurance U/w Svs
Australis Group Underwriting
Austruck Insurance
Axis Underwriting Services
Beazley Underwriting
Bizcover
Blue Sky
Brooklyn Underwriting
Brooks Inglis Insurance Brokers
Catlin
CBD Underwriting
CEMAC
Cerberos Brokers
Cerberus Special Risks
Cheap Travel
PI Direct Insurance Brokers
Professional Risk U/w
QBE Placement Solutions
Resource Underwriting Pacific
Richard Oliver
Southern Cross Underwriting
Suresave
Transcorp Underwriting
Tasman Underwriting
Sterling Insurance
Savannah Insurance Agency
SLE Worldwide
Sportscover
SRS Underwriting Agency
Starr Underwriting
Strathearn
Specialist Underwriting
Agencies
Trafalgar Risk Management
Travel Insurance Direct
Trident Insurance Group
Trinity Pacific U/w Agencies
Willis
Windsor Income Protection
Winsure Insurance Group
Woodina Underwriting
World Nomads
Cinesure
CKA Risk Solutions
Columbus Direct Travel Ins.
Coverforce Underwriting
Coversure
Dolphin Insurance
Dual Australia
East West Insurance Brokers
Elkington Bishop Molineaux
Epsilon Insurance Broking
Services
Fenton Green & Co
FP Marine
Fitton Insurance Brokers
Freeman McMurrick
General Security Insurance
Brokers
Go Unlimited
Gow-Gates Insurance Brokers
Guardian Underwriting Services
High Street Underwriting Agency
H W Wood
IBL (Planned Professional Risks)
Insurance Advisernet
Insurance Facilitator
Insure That
Ironshore Australia
IRS Steadfast
Jardine Lloyd Thompson
JMD Ross Insurance Brokers
JUA Underwriting Agency
Latitude
Lawsons Underwriting Australasia
Leisureinsure
Logan Livestock Insurance Agency
London Underwriting
Macquarie Underwriting
Magic Millions Insurance Brokers
Mansions of Australia
Manufactured Homes Ins Agency
Marsh
Millennium Underwriting
Miller & Associates Ins Broking
Miramar Underwriting Agency
Mobius Underwriting
National Underwriting Agencies
Nautilus Marine Insurance Agency
Newline Insurance
Newmarket Insurance Brokers
Nova Underwriting
OAMPS Australia
Online Insurance Brokers
Panoptic (Midas)
Pantaenius
Parmia
Source: Market Intelligence based on: Lloyd’s Delegated Authority Team 2013
Lloyd’s agencies and service companies you may recognise…..
© Lloyd’s 2012
Soft market + low returns
=
Year of account Combined ratio ROE
1985 106 – 108% 12%
2001 98 – 101% 12%
2012 84.5 - 88.7% 12%
Managing the cycle, Costs
& look for growing markets
© Lloyd’s 2012
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Europe
(including UK)
33%
Other
Americas
8%
Central Asia
& Asia Pacific
13%
Rest of
the World
5%
US & Canada
41%
(Total US &Canada)
41% 2011
43%2010
45% 2009
46% 2008
49% 2007
12% 2011
10% 2010
9% 2009
8% 2008
7% 2007
8% 2011
7% 2010
6% 2009
5% 2008
4% 2007
Lloyd’s gross written premium >2012
© Lloyd’s 2012