Lloyd’s of London Ltd. is meeting with major U.S. insurers about driving more business through its global insurance market, Chief Executive Officer John Neal said on Wednesday.
The 330-year-old insurance market, which launched its most recent modernization effort in May, will meet with American International Group Inc. on Thursday, and later with Chubb Ltd. about potential opportunities for selling more of their insurance products through Lloyd’s, Neal told Reuters.
Neal, who took charge of Lloyd’s in late 2018, is trying to drag Lloyd’s into the 21st century, following combined losses of $3.9 billion over the last two years. Lloyd’s insures everything from hurricane damage to soccer stars’ legs, but high levels of insured losses from natural catastrophes triggered the two years of poor results.
While Lloyd’s outlined plans last month to set up electronic platforms as soon as next year, its intricate structure involving 99 underwriting syndicate members and hundreds of brokers makes change difficult.
Neal said his strategy includes shifting Lloyd’s geographic focus, including concentrating on developed markets with strong growth potential such as the United States. The United States and Canada accounted for 51% of Lloyd’s business last year.
Lloyd’s kicked off its U.S. strategy during a dinner on Tuesday for top insurance and brokerage executives in New York’s new World Trade Center building, a site that following the destruction of the Sept. 11, 2001, attacks was rebuilt partly with $8 billion in claims payments from the Lloyd’s marketplace, its chairman, Bruce Carnegie-Brown, said.
“We are talking to all of the big insurers here…to say, How do you feel about the marketplace and what opportunities can we help you realize in the Lloyd’s marketplace?” Neal said, adding that both AIG and Chubb are interested in the conversation.
Lloyd’s has already been talking to AIG, including CEO Brian Duperreault and Peter Zaffino, CEO of AIG’s General Insurance business, about the possibility of selling more products through the marketplace, Neal said.
AIG acquired Bermuda reinsurer Validus in 2018, partly because of its Talbot unit, a Lloyd’s of London syndicate, Duperreault said at the time.
“Our impression from any conversations with (Duperreault) and Zaffino is that they’d love to grow their business at Lloyd’s,” Neal said.
Neal said his London-based colleagues were surprised when he proposed the United States as a priority because they believed emerging economies had more growth potential.
He sees growth potential in several U.S. areas, including specialty insurance, which covers unique risks such as damage to a company’s reputation, or liability for a merger deal that goes sour. “Professional lines” insurance, which includes liability coverage for corporate directors and officers, is another possible growth area, Neal said.
The global commercial, corporate, specialty insurance and reinsurance business is worth $750 billion, and half of those premiums are in the United States, Neal said.
“So literally, one dollar in two of everything that would interest Lloyd’s underwriters is here,” he said.
(Reporting by Suzanne Barlyn in New York Additional reporting by Carolyn Cohn in London Editing by Neal Templin and Leslie Adler)
Photographer of main image: Chris Ratcliffe/Bloomberg
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