Lloyd’s of London’s busy year in the Americas
Lloyd's expects to pay out
All the catastrophes have added up to a busy year for
He was in
"We had the chairman here for the event, and we also met with clients in
Through the years, the Lloyd's marketplace has insured everything from rock guitarists' hands to a
While he was in
A. A market such as Lloyd's has several components. First, you must have the capital. Capital, of course, is required for anyone who wants to offer insurance services. You need the capital to help people who have suffered losses get back on their feet. The capital is provided by both individuals and corporations that associate themselves in syndicates. There are about 80 of them in the Lloyd's market.
Those who make the decisions on underwriting -- who decide on reinsurance -- are the managing agents. We supervise these managing agents. On the other side of the equation are the brokers who bring in business from all over the world. They are the ones who have contact with clients.
The third part of the equation is the supervisory party and that's what we are. We make sure the processes are in place for processing claims and basically guarantee the market is working harmoniously.
A. A lot of the
Q. What are some of the unusual things that Lloyd's has insured in the
A. We insure very expensive horses, polo ponies usually. We insured the smile of America Ferrera when she played in "Ugly Betty." For soccer players, we've insured their legs. With rock stars, we're insured their voices, their hands if they play the guitar, or their fingers if they're pianists. We've insured the noses and tastebuds of sommeliers.
Because there are 80-plus syndicates in the Lloyd's market, you will find someone who will take on these highly specialized risks.
More traditionally, we insure big properties -- highways, airports, infrastructure investments.
Q. I would assume insuring some rock stars would be pretty risky considering some of their lifestyles.
A. You have to put in very specific clauses dealing with drugs and alcohol. Tell them these are the conditions and they have to behave if you want to be covered. You don't cover for people misbehaving; you cover for an accident that they couldn't control.
A. For the hurricanes, we have already paid
Q. I would think that many buildings in
A. The ones that were insurable had good construction. But a very low percentage of losses were insured. Less than 8 percent of what was destroyed was insured. It is shocking. We can compare that with
Q. What is the insurance penetration rate in
A. When we talk about penetration of insurance, we're talking about what percentage of the GDP is dedicated to pay insurance. In
We believe the only way to increase market penetration in
Q. What will be the impact on premiums because of all the natural disasters we've seen in the past year?
A. We've seen a lot of natural disasters on this side of the world, but you have to remember we insure for risks all over the world. For some of the impacted regions, an uptick on premium rates is probably due and I think it is healthy to have those upticks. But rates don't have to go up through the roof.
It is a competitive market and there is always going to be someone willing to take a risk. Traditionally in the insurance world after an earthquake, hurricane or other catastrophe is when the best deals are done.
Q. What should people be doing at this point to prepare for other potential catastrophes in 2018?
A. Decide what risks you want to take. If you want to live in front of the ocean, which has the most beautiful view, that's where hurricanes are going to impact you the most. So you have to balance how you want to live your life. You can live with a lot of risk and have a beautiful view or you can live inland. If you want a sea view, property insurance will be high. You have to be prepared to accept the consequences of taking risky positions.
Businesses also need to make sure they have the proper risk management programs in place.
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