Before the 2006 World Cup in Germany, Beckham bought insurance worth up to GBP 31 million for his legs; in 2009, Manchester United superstar Cristiano Ronaldo also bought insurance worth up to RMB 100 million for his legs—so long as a leg injury keeps them off the pitch, they can receive huge compensation from insurers. Almost all of these high-profit, high-risk insurance products come from the British insurance market organization—Lloyd's (LLODY'S).
Throughout its three-hundred-year history, this insurance market has never lacked big-name stars, and the maverick Lloyd's is also a model of innovation in the insurance world. In the 17th century, starting from marine cargo insurance, Lloyd's went on to produce many firsts in the insurance market: the world's first auto insurance, aviation insurance, space insurance...
On September 22, the more than three-hundred-year-old British insurance organization Lloyd's held its sixth "Lloyd's Day" event in Shanghai. Lloyd's said that in future insurance product innovation, it will focus on China's sharing economy, including how to cooperate with Chinese sharing economy companies such as Didi and ofo, and is even preparing to underwrite autonomous driving technology.
Eric Gao, head of Lloyd's Greater China and Chairman and General Manager of Lloyd's China, said publicly at the forum: "Lloyd's has always been thinking about how to continuously improve its core underwriting business while creating new channel models or new approaches, thereby maintaining its commitment to providing innovative insurance and reinsurance solutions for the world's most complex risks."
Chris Moore, senior liability underwriter at a Lloyd's syndicate, belongs to Apollo, a Lloyd's syndicate brand that once insured astronaut Armstrong; since 2014, it has been the insurance product provider for the sharing platform Airbnb.
Chris Moore said that the business model of Airbnb—the world's largest accommodation provider, yet a sharing economy company that owns no real estate—has presented us with new challenges. In this relationship, who will be the insured? Should property insurance on the home be provided, or other insurance? This may be something the traditional insurance industry has not seen, and it requires tailor-made products and solutions to meet their needs.
Chris Moore also listed several advantages of insurance for the sharing economy. For example, through insurance, companies involved in the sharing economy can protect their balance sheets and users; claim payments can reduce the spread of negative news about the sharing economy and increase trust in sharing platforms. In terms of regulation and compliance, the sharing economy is prohibited in some areas, but with the support of insurers' "innovation empowerment", it may be possible to reduce restrictions from regulatory laws and rules.
Because Lloyd's unique operating model had no basis in China's existing insurance laws, in 2007 Lloyd's made an exceptional entry into China in the form of a subsidiary. 2017 marks the tenth year of Lloyd's presence in the Chinese market, which has become its largest market platform outside the UK. The business focus of Lloyd's China subsidiary remains its areas of strength—marine, satellite, fire and aviation reinsurance business as well as advisory business.
Currently, Lloyd's has 28 coverholders in the Chinese market and 32 syndicates resident on the China market platform, the largest group and number outside the UK market.
Gao revealed that over the decade, Lloyd's China's premiums grew from only a few million RMB in 2007 to RMB 2.1 billion in 2016, while total assets increased from RMB 250 million to RMB 6 billion, with claims totaling about RMB 1 billion over the past five years.
Lloyd's originated from Lloyd's Coffee House, a coffeehouse opened by founder Edward Lloyd. Because sailors, shipowners and merchants often gathered there to discuss marine insurance news—such as shipwrecks and foreign trade news—the little coffeehouse naturally became a place where insurers and clients exchanged information. In 1688, Lloyd's transformed from a coffeehouse into an insurance trading market.
Besides regulating underwriters' business through acts, Lloyd's also played the role of reinsurer in the early days before reinsurance companies joined. When major claim events occurred and individual underwriters lacked the capacity to pay, Lloyd's would draw on the reserves paid in by the underwriters (the Central Fund) to make payments. At Lloyd's, underwriters form different types of syndicates according to the content insured, jointly taking on insurance contracts.
In 2016, the annual report of Lloyd's, the world's specialist insurance and reinsurance market, showed that total premiums of Lloyd's insurers reached GBP 29.9 billion, with pre-tax profits of GBP 2.1 billion. Although Lloyd's is not large enough to rank among the world's insurance giants, its outstanding contributions to the marine insurance and reinsurance markets are recognized worldwide. The Shanghai Insurance Exchange, established in 2016, drew in part on Lloyd's operating model.
Source: Jiemian News 2017-09-25