US risks best suited to Lloyd's market

The Lloyd's market is well suited for the risks associated with US professional and management liability, Johnny Rowell, head of specialty lines at Beazley, told the Association of Lloyd's Broker's in Chicago.

Promoting the merits of the Lloyd's model, Rowell said, “If you could compare what we do with the investment management business, you could say that we at Lloyd's are like a group of specialized, highly focused private equity firms. We're not a Vanguard, we're not a Fidelity. But together we add up to a substantial player in the global market because there are perhaps even more insurance opportunities that play to our strengths than there are investment opportunities for private equity firms.”

Rowell highlighted the many advantages afforded by the Lloyd's market, including: the depth and breadth of the talent pool which the market offers; the far-reaching broker network which services it; the regulatory structure which keeps it “ahead of the curve” in Europe in terms of capital requirements; and efficient capital management and the key role played by the central fund in this.

Focusing on the recent Equitas deal with Berkshire Hathaway, Rowell highlighted the positive reaction of the rating agencies to this move.

While acknowledging that Lloyd's faces a number of challenges, such as expense ratios, tax disadvantages, and a “patchy” record in terms of its use of technology to enhance performance, he concluded, “The competition is getting better all the time. But I think that London still has an edge.”