Lloyd's of London targets foreign investors for new business

By Tom Arnold

DUBAI (Reuters) - Lloyd's of London [SOYLD.UL] wants to encourage more foreign investment to bring in business, its chief executive told Reuters on Wednesday, as the insurance market undergoes rapid consolidation.

"The market is going through a phase where it's difficult to see too much growth if you're an established player and therefore you will see this consolidation happening," said Inga Beale in an interview in Dubai.

The Lloyd's market, which occupies fifth place in terms of global reinsurance premium income, has seen a flurry of deals as increasing competition and tighter capital rules weigh on premiums.

Last month, Fairfax Financial Holdings (TO:FFH), the Canadian property and casualty insurer, said it would buy Brit Plc (L:BRIT) for some $1.88 billion(1.26 billion pounds) to become one of the top five underwriters on the market.

That came a month after XL Group (N:XL) snapped up Lloyd's of London's Catlin Group (L:CGL) for $4.22 billion. Meanwhile, Qatar Insurance Group last year acquired Antares, another underwriter.

Still, as rates remain under pressure, Lloyd's is keen to manage the flow of new entrants to the market.

If foreign investors were not buying existing Lloyd's insurers, they needed to bring new business to the market, Beale said.

Beale was speaking at the opening of a new underwriting office in the Dubai International Financial Centre to serve its Middle East clients, which include energy giants such as Saudi Arabian Oil Co , airlines and other large companies. Nine insurers will initially offer cover including marine, energy, real estate, terrorism, political risk, aviation and trade credit.

Having started in a coffee house in the 17th century, Lloyd's has been increasingly seeking to tap emerging markets, where levels of insurance penetration are lower. In addition to offices in Europe, the Americas and Australasia, it has a presence in China, India, Hong Kong, Singapore, Namibia, South Africa and Zimbabwe.

North America and Europe each account for 40 percent of the market's business at present, with the remaining 20 percent from Asia Pacific, Latin America, Africa and the Middle East, said Beale. As emerging markets grow they will account for a bigger proportion of Lloyd's overall market, she said.

Lloyd's businesses provided $500 million of insurance cover in the Gulf Cooperation Council in 2013, said Beale.

"In mature markets we aim to keep up with GDP growth and in emerging markets we would like to keep up with insurance premium growth," she said.