A bulletin on the Lloyd’s Website (www.lloyds.com) examines the growth of the insurance market in Singapore, and concludes that the city-state, which is already home to a number of foreign insurers, is poised to take on an even larger role in the future.
“Low operating costs and a vast population have been major factors in the continuing economic growth in Asia, prompting economists to predict that the region will become even more prominent,” said Lloyd’s. “With this comes opportunities for international insurers, and an increasing number of companies are starting to feel the benefits of having a presence in Asia.”
While Lloyd’s notes that economic growth in China and India is well documented, “companies are increasingly looking to the rest of Asia, specifically Singapore, to establish operations. A thriving island of more than four million people, Singapore has a free enterprise economy, with no restrictions on foreign ownership of businesses and employment of foreign expertise, making it ideal for the more than 7,000 multinational corporations that use Singapore as a base for their business operations.
“Lloyd’s Asia’s successful growth in Singapore illustrates the opportunities that the country has to offer. Under its umbrella, syndicates have a platform from which they can establish operations and underwrite business in Singapore and the surrounding region.”
Anthony Egerton, President of Lloyd’s Asia-Pacific, noted: “Back in 2002, we had two syndicates and today we have five. This year, they will write annualized income of $100 million as opposed to $7m in 2002.”
He cited “several reasons why the market is so attractive to companies. First and foremost, the framework from which they can establish their business is already set up. They are essentially joining a ‘mini-Lloyd’s’ in Singapore – in essence a ready-made, plug-and-play environment. In addition, companies which traditionally operate in Europe and North America are exploring opportunities in Asia, with its low penetration rates and growth prospects, where the market for reinsurance and insurance is set to grow favorably.”
Egerton added that “two of the seven companies operating at present are unique – they have no underwriting presence in London, although they do have managing agents to look after their affairs. As a result, they are operating solely with Asian capital and Asian-based underwriting doing Asian business. For London-based operations, establishing their business here means they can get closer to the opportunities in the market, which they would not necessarily see in London.”
Lloyd’s also indicated that Lee Hsien Loong, Prime Minister of Singapore, has an equally optimistic outlook on the future of Asia as a business center. He’s urging European business to not just focus on China and India but to consider the entire region when planning for the future. “Europe should strive to deepen its relationship with Asia and go beyond the region’s two largest economies, China and India. Europe needs to broaden its links with other significant parts of Asia, including ASEAN (Association of South East Asian Nations) and Japan,” the Prime Minister stated. “This way, Europe can participate fully in the transformation of Asia, build up its stake in the region and play a full role in an important part of the world.”
Egerton sees more future development in the region. “We are confident that two more companies will be joining us by the end of this year and a total of up to 12 or 15 by the end of 2007,” he noted.
The following is a list of Businesses operating in Asia
Capacity: £35 million [$66.3 million] (will be raised substantially for 2007)
Classes of business: Property, onshore power and energy, construction, engineering, marine cargo.
Ascot has announced their intention to open an office in Singapore, subject to Lloyd’s and the Monetary Authority of Singapore approval.
Classes of business: Property, cargo, hull, energy and terrorism.
Capacity: Catlin Asia can offer up to $50 million in capacity, depending upon the class of business underwritten
Classes of business: Marine hull, marine cargo, marine war, marine liabilities, terrorism, credit, political risk, construction, property, treaty reinsurance, personal accident, general liability, professional indemnity, fine art, jewelers block, cash in transit, aviation, energy (on and offshore).
Capacity: $50 million
Classes of business: All classes of engineering and construction insurances
Classes of business: Marine cargo, specializing in frozen food and cargo rejection
Asia Marine – Syndicate 1965
Classes of business: Marine hull, cargo, marine liability, offshore energy and niche business
Capacity: $20 million
Classes of business: All marine lines of business are written
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