Lloyd’s chairman turns focus to emerging markets

by David Masters

Story link: Lloyd’s chairman turns focus to emerging markets

Lloyd’s of London, the biggest insurance market in the world, must seek to increase operations in emerging markets, according to Chairman Peter Levene.

Speaking last night at the annual London City dinner, Levene said the balance of world power is moving from the West to emerging markets in Latin America and Asia, and to oil rich countries in the Middle East – a fact that insurance companies cannot afford to ignore.

Lloyd’s is a conglomerate of wealthy businessmen and commercial underwriters that make insurance transactions through syndicates and managing agents.

Currently 40% of its premium income is made in the United States, but recently it been increasing business in China and some other Asian states. However, investment in India – a huge market yet to be tapped – is held back by state protectionism.

In addition to urging the insurance industry to move with the times, Levene had harsh words for the British government.

Levene said Lloyd’s is ‘under threat’ from other countries offering more attractive tax rates, and called for immediate action from Chancellor Alistair Darling to rectify the matter.

Implicit in Levine’s words was a warning to Darling that Lloyd’s itself, despite its 320 year British history, would consider moving abroad if UK tax rates fail to improve.

With Darling himself confessing that the UK economy is at its lowest point for 60 years, the lure of tax relief in havens such as Dublin, Gibraltar and Bermuda has proved too much for some British companies.

Four British companies, including the publishers United Business Media Plc and the pharmaceutical company Shire Ltd, have announced plans to move their tax bases abroad in the past year.