Lloyd’s Middle East launched its operations in Dubai in March 2015, with CEO Inga Beale officially opening the office in the Dubai International Financial Centre (DIFC). The opening the Dubai office is part of Lloyd’s Vision 2025 strategy (V25) that is committed to maintaining Lloyd’s as the global centre for specialist insurance and reinsurance, which will be achieved through greater global diversification and representation in high-growth, developing economies such as the Middle East.
Lloyd’s Asia platform in Singapore has demonstrated the value of local markets to Lloyd’s with considerable business placed locally, as opposed to going back to London. The Middle East has increasingly proved that this is also the case, with the DIFC, in particular, having now positioned itself as the primary wholesale hub for the region, supported by a vibrant and growing broking community who place business locally. We are cognisant of this shift and the part we must play in a fast-moving and increasingly important international market.
The office in the DIFC is the accumulation of existing Lloyd’s businesses, some of which have operated out of the DIFC market for a number of years, and also a number of new Lloyd’s businesses that have recently entered the market. Since March 2015 we have added two further businesses to the platform which have taken it up to nine, with a further three Lloyd’s businesses operating within the wider DIFC marketplace. Lloyd’s provides a flexible platform that enables market players to implement their own business strategies effectively.
The office also supports a number of other Lloyd’s businesses that are not co-located in the Dubai office, and Lloyd’s registered brokers and coverholders who continue to operate across the region. Regardless of location, it is important that the market is cohesive and homogeneous where possible.
First-year achievements
Lloyd’s had a positive 2015 with a number of important goals achieved.
All businesses operational
The main priority for the year was to get all of the businesses set up and operational on the Dubai platform. This has taken a significant amount of time as a number of the businesses needed to relocate from existing locations across the DIFC. We have had great support from the DIFC Authority who have helped in this process to ensure that it has been as smooth as possible.
Whilst the focus for the year has been to set up the platform, which has involved Lloyd’s with a number of moving parts, the response to the opening and the fact that Lloyd’s has committed fully to the region has been well received. Broker, cedants and other partners, many of whom are used to working with the Lloyd’s market in London, have been extremely positive and supportive of what we are trying to build, and we continue to work hard to ensure we are aligned with growth plans in the region. As part of our first year, we organised a number of broker and cedant events on the platform that enabled our partners to find out more about Lloyd’s and how we operate, as well as providing an opportunity for them to meet with underwriters, understand their capabilities and our combined areas of market expertise.
Allowing access to multiple markets
One of the key reasons for Lloyd’s to commit to the region was to better support its existing businesses and those that wanted to set up in the region. The concept of creating a local Lloyd’s market was very important. Previously, businesses who had operated in the region did so independently from their own office. Creating this shared sense of identity and purpose remains a key part of what the Lloyd’s market is and how it operates, and has provided our partners across the region with a single point where they can reach multiple markets from one office. By having these multiple businesses on a single platform, we are able to offer our partners greater access to Lloyd’s expertise and products, and this is something that we are looking to build out over time.
Linked to this is the concept of a subscription market and this is something that the Lloyd’s has always valued as it offers opportunities to our partners. Subscription underwriting and sharing of risks in a face-to-face environment is something that is gaining more traction in the region and we have been really pleased at how well many of the brokers have supported this model by placing risk across multiple Lloyd’s businesses.
Increasing sophistication
Over the last 12 months, and particularly for the more recent service companies that have started, the product suite has become more specialised and niche. However, we are now seeing the service companies starting to add more lines and products as they look to grow. As the market develops with more and more lines being offered, this will help facilitate greater opportunities for subscription, lines slips and consortia as we look to build out and share the expertise that we have across the market. Lloyd’s is traditionally a market where entrepreneurialism and innovation thrive and over time, I see more and more development from the Dubai hub.
Training and development
Training and development is another core area for Lloyd’s and we have a great opportunity to work with the regional markets and draw on our experience to support where we can. In 2015, we hosted 14 Middle East-based brokers in London for training as part of Lloyd’s Global Development Centre, along with two regional regulators so that they could understand more about Lloyd’s, how we work and the benefits that the market can bring to a region. We will be offering more of these events in 2016 and see this as a valuable tool where Lloyd’s can help drive further awareness and understanding.
Research
Lloyd’s also launched its City Risk Index in 2015, which, in conjunction with Cambridge University, provides ground-breaking analytics of the potential impact on the economic output of 301 of the world’s major cities from 18 man-made and natural threats. Lloyd’s, as a member of the DIFC Insurance Association, will also be supporting and using this research to help drive more development and best practice in responding to threats in the region.
Priorities for 2016
As we start 2016, there are a number of key priorities that Lloyd’s is focused on.
First and foremost, we will look to embed our position across the region and to support this, we will hold a number of market events throughout the year. In particular, the first Middle East “Meet the Market” is planned for 12 April where Chairman of Lloyd’s John Nelson will be in Dubai to launch the event. This will be an exciting time for the region and for Lloyd’s as we replicate the underwriting room from the building in London, in Dubai. With underwriters from both London and the local market in attendance, the regional broking market will have the opportunity to engage across a number of Lloyd’s syndicates in one location.
In addition, the platform in Dubai will continue to grow as more service companies, Lloyd’s registered brokers and coverholders develop and play a part in the overall Lloyd’s market growth. Lloyd’s is committed to the region and with this commitment, significant interest has been generated with managing agents in London, as well as brokers as they take advantage of the infrastructure and support that the Dubai office is now providing them with market access and entry.
We will also continue to work very closely with the DFSA as we establish Lloyd’s in the DIFC and ensure the appropriate structure is in place for Lloyd’s to operate effectively. All businesses on the Lloyd’s platform will continue to be independently regulated by the DFSA. However, it is also important that Lloyd’s itself has the appropriate structure from which to support and drive market growth across the platform.
Mr Mark Cooper is General Representative Middle East, Lloyd’s of London.