Global Growth: Entering New Insurance Markets.

Legal News & Analysis – Asia Pacific – Insurance & Reinsurance

15 March, 2016

 

As insurers/reinsurers start to look beyond their domestic, often mature, markets for growth opportunities they face an almost overwhelming choice in terms of which markets to consider, the structures available and the advantages and disadvantages of each.

 

There is no doubt that London (of which the Lloyd’s market is a major component) is one of the most pre-eminent insurance centres in the world,

 

If you are looking to set up a new insurance underwriting business, location is a critical issue – not just where you want to be doing business, but also the speed of set up and the regulatory environment in which you will operate.

 

There is no doubt that London (of which the Lloyd’s market is a major component) is one of the most pre-eminent insurance centres in the world, with around 15% of global industrial risks being placed there. Over the last five years a steady stream of foreign insurers – from both mature markets such as the US and Japan, as well as emerging economies such as China - have, either through acquisition, start-up or joint venture, established themselves in this insurance hub. But a range of other jurisdictions are making themselves attractive for start-ups; such as Zurich and Gibraltar, and increasingly Singapore for South East Asia.

 

An insurer/reinsurer looking to establish themselves needs to consider a number of different issues when looking at various locations – the time taken to obtain authorisation, capital requirements and the ability to do business around the world. For example the main advantage of Gibraltar or Malta is the speed of set-up.

 

From the decision to apply for a licence to it being granted is typically between three and six months, whereas in the United Kingdom it would take that long just for the regulator to consider the application.

 

Over the last 20 years, Bermuda has proved to be a popular domicile – particularly for reinsurance businesses. The island’s ability to respond to capacity shortages through the rapid creation of new carriers has been demonstrated time and time again. It combines rapid regulatory approval, an attractive tax environment and a geographic position that is convenient for both the US and Europe. Singapore too has made clear its ambitions to be a regional insurance hub and has taken steps to position itself as the market of choice in South East Asia.

 

This Report aims to offer a high level review – by region – of the opportunities and challenges available to an insurer/ reinsurer. We hope that you find this Report useful as part of your international underwriting strategy. 

 

To download the report, please click here (109MB)

 

Clyde & Co

 

For further information, please contact:

 

Andrew Holderness, Partner, Clyde & Co
[email protected]