British insurance market Lloyd's of London intends to capitalise on the rapid development of emerging Asia to boost growth of its specialist insurance business.
Growth in gross written premiums - a reference to the total value of new policies - in China, India, and the Asean region is outpacing economic growth, chief executive Inga Beale told The Straits Times.
The growth potential exists because insurance coverage in these countries is now at a "very low base", she added.
Ms Beale was in town for a reinsurance conference.
Economic growth in the region has fuelled demand for insuring against risks to construction projects, as well as infrastructure facilities like ports and rail, said Ms Beale, adding that countries are also seeking cover against aviation and terrorism risks.
As markets further urbanise, demand for insurance against more intangible risks like cyber and reputation risk will rise, she said.
Lloyd's is placing greater focus on the region, spurred by a study it commissioned last year showing that emerging markets accounted for nearly 50 per cent of the world's commercial insurance growth in the last three years.
Lloyd's captured only 0.5 per cent of that growth from its London headquarters, said Ms Beale.
She said emerging markets is an area in which Lloyd's has not been traditionally strong. "Lloyd's wants to be part of those new growing markets, and that means we have to have more of a physical presence and have underwriters on site."
Although there is stiff competition in the insurance sector here, Lloyd's will distinguish itself by focusing on very specialist risk areas, Ms Beale said.
These niche areas include cyber risk, political risk, marine energy and aviation. "You need to have technical expertise to write those risks so we think it's quite niche and not so prone to the highly competitive market."
Strong regulation of the insurance sector by the Monetary Authority of Singapore has contributed to the Republic becoming an insurance hub for many of the countries in the region, she said.
"Insurance is all about building trust because we are issuing... a promise to pay in the future if something goes wrong.
"The strong regulation that people can trust makes it a perfect environment to do insurance."
From 2010 to last year, Lloyd's premium income from its Singapore office shot up 170 per cent in aggregate to about US$622 million (S$886 million). Last year, the Asia-Pacific contributed about 11 per cent of Lloyd's US$41.7 billion premium income.
The Lloyd's platform here consisted of just two syndicates offering underwriting services when it first started operations in Singapore in 1999. A syndicate is a group of individuals or companies formed to transact a specific business.
Now, it has 24 syndicates here and a further "pipeline of interested people" who may want to join the platform, Ms Beale said.
Lloyd's is also looking to raise awareness of the importance of insurance and reinsurance in regional countries which are significantly under-insured, she said.