Inga Beale highlighted Latin America and Mexico as a key region and growth opportunity for Lloyd’s, as the centuries-old re/insurer positions itself for further growth in the emerging market and seeks to strengthen ties, perhaps especially in light of a post-Brexit operating environment, in a speech at the Mexico AMIS Insurance Conference.
In 2016, Lloyd’s wrote in excess of $340 million premiums in Mexico – mostly in property, energy, marine and aviation lines of business. And over the past five years, Beale said, Lloyd’s has experienced a 5% compound annual growth rate, measured against the Peso.
Beale commented; “Latin America is a hugely important region for Lloyd’s. With 600 million customers, representing 10% of the global population, we know that over the coming years the insurance market will continue to grow, as underinsurance is tackled.
“We have been a foreign reinsurer in Mexico since 1985 and opened our Representative Office almost two years ago and have been very grateful for the support we have received from Mexico’s Ministry of Finance.”
Within the region, Lloyd’s acts mostly to support the domestic insurance industry with reinsurance as well as specialist products and Beale added that “Lloyd’s is committed to supporting Mexico’s economic growth and also this country’s pioneering application of catastrophe and agricultural risk management, through initiatives such as the federal catastrophe fund – Fonden.”
Despite a global move towards increased protectionism, the Mexican government has remained open, seeking to protect Mexico’s economic growth through diversifying the significant natural catastrophe risks.
“Of course, with everything going on around the world – Brexit, the new Trump administration in the US, and the rhetoric surrounding the French presidential election – we are seeing a rising tide of protectionism.
“But Mexico understands the value of open markets, and global trade which signals a welcome push back on the economic nationalism we have seen in many other parts of the world. In fact – Mexico’s trade policy is among the most open in the world, with the most Free Trade Agreements globally with 46 open trade partners,” said Beale.
The Lloyd’s CEO also mentioned Mexico’s importance as a trade partner to the UK, as Brexit means the UK stands to lose Mexico’s free-trade agreement with the EU and has begun negotiations to preserve the roughly $32 billion UK-Mexican trade industry.
Beale said “it is crucial that this is protected,” recognising the significance of remaining strongly connected to emerging markets where the future for re/insurers is being forged, perhaps also as a response to recent reports which show the City of London falling behind in the emerging market share.
The Lloyd’s CEO stressed the market growth potential within the Latin America region, added that emerging economies “including some of those in Latin America, have been growing at a faster rate than their Western counterparts.
“It is predicted that by 2050, the E7 economies – which include those of Mexico and Brazil – will be larger than those of the G7. In fact, Mexico’s economy could be larger than the UK’s in just 15 years.”
