As the carnage wrought by the coronavirus continues apace, serious insurance businesses are now starting to focus less on damage control and more on planning for the future.
Lloyd’s is no exception and recently promoted Mr Pavlos Spyropoulos to country manager, Singapore and CEO, Lloyd’s Asia to help spearhead the specialist insurance and reinsurance market’s next phase of growth.
Mr Spyropoulos is a 12-year veteran of Lloyd’s where he worked previously as head of market development for Lloyd’s in Asia Pacific. He was also recently elected as a new member of the Singapore Reinsurers’ Association executive committee for 2020-2021.
It would be handy to be able to look at the performance of the various markets in Asia Pacific as a league table to see which market was hit hardest by the pandemic and which was emerging quickest, but Lloyd’s is not structured to provide such an overview.
“We tend to look at lines of business rather than countries - but we are seeing an impact in Australia, for example,” said Mr Spyropoulos. “Australia has been correcting for a while in terms of the performance of the market and we are continuing to see that. We’re seeing more strain in the local markets for certain lines of business.
“That’s created more opportunity for markets like Lloyd’s, particularly in the specialist space and particularly when we’re seeing local markets unable or unwilling to write certain risks. The consequence is that more business is flowing into regional centres like Singapore or London,” he said.
Other regional markets are also under pressure. “India is going through quite a significant lockdown right now and we’re seeing some slowdown. Malaysia and Indonesia data demonstrate clearly that there’s significant pressure in those markets too.”
But Lloyd’s takes a more granular view of the different business lines. “Contingency, for example, is a big class of business for the Lloyd’s market and we’ve seen a pretty significant impact there,” Mr Spyropoulos said. “In Japan, where we typically write a lot of contingency business, we’ve been affected. I’m seeing a lot of it being reduced.”
Strategy for the future at Lloyd’s
Establishing a road map for future business development is not a task Lloyd’s has undertaken in isolation. “I’ve spent the last six weeks consulting closely with the managing agents operating on the Lloyd’s platform in Singapore to get their views too. But the big priority at the moment is the Future at Lloyd’s strategy.”
The Future at Lloyd’s strategy is a global initiative that was launched last September to create an ultra-modern insurance marketplace and provide customers with the support and protection to grow.
“The Future at Lloyd’s aligns very well with what I consider to be the priorities for Lloyd’s and Singapore, because we have a big opportunity to digitise and improve our operational infrastructure on the platform,” Mr Spyropoulos said.
“Twenty years ago we started with three syndicates and now we have 14 different players. When we kicked off, we didn’t have a common infrastructure. We have a common licensing structure here in Singapore, but we didn’t have a central infrastructure the way you see Lloyd’s operating in London with the company market.
“The ultimate objective is that we become a more efficient platform for players on the Lloyd’s market and the ultimate goal is easier and more efficient access for our clients,” Mr Spyropoulos said.
“We are focusing on improving things in areas like middle and back office, a complex risk platform, claims and capital. At the moment we are drilling down into which of those solutions we think will have the biggest impact on the platform here - and then doing a piece of analysis to see how we will go about implementing them. That really is the number one priority.”
Importance of culture
There is also an acknowledgment that it is important to promote the right culture to achieve real change and lasting growth.
“If we haven’t got the right culture, it is very difficult to drive solutions,” Mr Spyropoulos said. “But beyond the DNA alone, having the right culture to attract the right talent can help us deliver these solutions. In consulting with the managing agents, one of the main pillars we’re talking about is culture and community - how do we position the Lloyd’s platform as being the most attractive place for talent to come and work?
“We want Lloyd’s to be seen as a place where people can come and develop their careers and feel a sense of prestige for having operated or worked for a Lloyd’s underwriting firm. It really is a market initiative with participation of the managing agents. So we really need to have everyone aligned around that goal,” he said.
The ultimate goal for the Singapore market is for Lloyd’s to be seen as the centre of the community for specialist reinsurance. “I’d love to reach the position in five years where people automatically think of Lloyd’s in Singapore in a similar fashion to the way they think of Lloyd’s in London,” Mr Spyropoulos said.
Lloyd’s in Singapore has also continued to fly the flag for Dive In, the global diversity and inclusion festival for the insurance industry. Now in its fifth year, the festival too place again in late September on a virtual platform.
Changing and growing the business
What does Mr Spyropoulos see as his immediate priority as country manager for Singapore?
“We currently have 14 managing agents trading here,” Mr Spyropoulos said. “In terms of the Singapore hub, they’re well established, they’re very committed, they’ve got good infrastructure in place and they’re committed to investing and growing. So my aspiration would be to see this platform growing in terms of the overall premium.
“In 2019 our income on the platform was $673m. I think we can increase that significantly because of what we expect in terms of the long-term business plans for managing agents operating here - but also because of some of the improvements that we can make to the platform will make us a more attractive place for managing agents to come and operate and for business to come here.
“I think we will have a larger amount of underwriters on the platform than we do now. I also expect there to be more underwriters in the specialty space. Most of the business we do here is classified as specialist, but I’m talking about more niche, more specialised classes. When we started, we had a focus on marine and energy. They remain important but now, if you look at the split of income, we’ve got a much bigger presence on the specialty and reinsurance side,” he said.
Equally interesting from a Lloyd’s perspective, the platform is beginning to see investment in areas like political risk and trade credit. “We are a very meaningful proportion of the Singapore market now in terms of the specialty we can bring and the number of experts we have on the platform in this class,” said Mr Spyropoulos.
Naturally there are also other indications of the market achieving greater maturity and depth.
“The other thing you’ll see is more collaboration among the players on the platform,” said Mr Spyropoulos. “Lloyd’s in London is a very well-oiled machine in terms of being able to provide a subscription underwriting proposition to the market. We do that here to a degree, but I think we can really help drive that forward by making some operational improvements to support that way of trading. That’s where I envisage us being in five years’ time.” A