Lloyd’s to launch India ops from Mumbai in ’17

Mumbai: Lloyd’s of London, the birthplace of modern insurance, has filed an application to set up operations in Mumbai. The institution has said that it expects to commence operations from

2017

.

Lloyd’s presence in India has been facilitated by an amendment to the Insurance Act last year, which makes an exception for the London-headquartered group which provides reinsurance services through a unique structuredifferent from any other institution. While all reinsurance giants are structured as a corporate, Lloyd’s acts like a marketplace or a stock exchange where insurance underwriters are members. Buyers enter into contracts with the specialists, while Lloyd’s acts as a facilitator.

Lloyd’s chairman John Nelson, who is in India as part of British Prime Minister Theresa May’s delegation, said that the institution had decided on Mumbai and would most probably headquarter its business in the BKC financial district. While Lloyd’s traces its origins to more than 300 years ago, as a marketplace it offers the most modern insurance covers including those for cyber risks, supply chain logistics, driverless vehicles and drones, Nelson told TOI.

“What this development means is that the Indian market will have a platform similar to the one we have in Singapore,” said Nelson. He added that Lloyd’s would take its business forward “slowly, steadily and cautiously”. “We already have the slight disincentive with the domestic reinsurer having the right of first refusal. But I think gradually it will liberalise as it is in India’s economic interest given the low rates of insurance penetration,” he added.

“I think there is a wish on the part of the government and the regulator to liberalise the insurance market so that there is a level-playing field. They understand the economics of it given the low penetration of insurance in India,” said Nelson. He added that insurance penetration in India (premium to GDP) is around 0.6% as compared to 6% in most developed markets. “I think there is an understanding of the need to increase insurance penetration — both for the sustainability and growth of the economy,” he said.

Nelson said that while the Mumbai office will have the feel of a marketplace, nothing can replicate the room in London. “It will be a modern version of it. Managing agents will be in the same building, probably on the same floor,” said Nelson.


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