Lloyd's of London CEO Inga Beale said Donald Trump's presidencyand the U.K.'s planned exit from the European Union are creatingopportunities to sell insurance guarding commercial clients againstdisruptions in global commerce.

“I wouldn't be surprised if we start seeing much morepolitical-risk insurance being bought all over the place,” Bealesaid in an interview Tuesday in Miami. “Because we're such aspecialist insurance, and we provide that type of insurance, youcould say that could be seen as an opportunity.”

The coverage often involves smaller trading partners, ratherthan developed-market powers, but shifts in the U.S. and U.K. couldredraw the political-risk insurance map, according to Beale. Shesaid Trump's victory in November “is leading to quite a bit ofuncertainty,” and cited the possibility of a U.S. border taxdesigned to encourage manufacturing in the U.S.

Man-made hazards for businesses are on the rise, marked by anincrease in global populism, the spread of terrorism and the threatof cyber crime. Lloyd's is the world's oldest insurance market, andis used by businesses seeking to guard against large or complicatedrisks. Setting prices on these policies can be difficult forinsurers however, as they don't have the benefit of the decades ofdata available on weather-related threats such as hurricanes.

Chubb's View

Evan Greenberg, CEO of Chubb, warned in July that it could beperilous for insurers to take on more risks at a time ofuncertainty. The policies can protect customers againstconfiscation of property and include so-called contract-frustrationinsurance.

“Sounds like a brilliant time to get into that business,” hesaid sarcastically of rivals. “I wish them a lot of luck becausethat's all they got going for them.” Weeks after Trump becamepresident, Greenberg said he was “ concerned about our owncountry's potential trade and security posture.”

Beale said it was too early to quantify demand.

As a result of the U.K.'s decision to withdraw from the EuropeanUnion, Lloyd's of London is planning to open a subsidiary inContinental Europe. Beale said Frankfurt, Luxembourg and Dublin areunder consideration, but that France is probably off the table.

She estimates 95% of business will be unaffected by Brexit.About 11% of the marketplace's volume comes from non-U.K. EuropeanUnion countries, but some of that will still be able to beunderwritten from London, she said.

From: Bloomberg News

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