Expansion Has Challenges, Even For Lloyd's

Lloyds Chairman Lord Peter Levene is very interested in seeing expansion of global markets outside of the U.S., he told me yesterday during a chat at the Peabody, here in Orlando. Thats the hotel famous for ducks marching into and out of the lobby every day and frolicking in the hotel fountain.

Mr. Levene said the U.S. accounts for a huge 40 percent of Lloyds business and that while he would like to see business in the U.S. increase, he would also like to see it decrease as a percentage of Lloyds total business.

The U.S., he said, will always be the bedrock of Lloyds business because Lloyds is understood and well regarded here. After all, Lloyds has a history with the U.S., which has viewed it favorably. In the U.S. Lloyds wrote its first policy about 200 years ago and is well known for helping to build back San Francisco after the great fire. It also has gotten publicity for some quirky coverages over the years. Recently it insured Ugly Bettys smile and in the past insured the ghost on the Queen Mary.

The original policy, which is part of a display at the Lloyds booth during the RIMS conference here, was to provide protection in case someone was frightened out of their wits at the sight of the ghost. I was also told that no claim was ever paid.

Mr. Levene said that while there has been a rush for companies to establish themselves in Brazil, Russia, India and China, not everything has panned out. For me, Brazil and China are very importantRussia, who knowsand India is just stuck in the mire. India, he went on to say, has very old legislation, which actually prevents Lloyds from operating locally in the country. Theyve promised us ever since Ive been at Lloyds it was going to be changed next week. Ive just given up waiting, he added, noting that he doesnt expect to see the kind of progress needed there for 20 years. However, he said, having a presence in India doesnt cost a fortune, and maybe theyll surprise us. He added, You win some, you lose some, but Brazil and China are where its going to be.

Its for these reasons that Lloyds is so encouraged by progress in Brazil, which Lloyds announced last week has grown 85 percent in the first year. The Brazilian government worked quickly to accommodate Lloyds, which isto Brazils advantage.

And Brazil, one of the most sophisticated countries in the world in many ways, it is not without its problems. One of them is security and safety for those doing business there. Kidnapping of executives has been a threat in Central and South America, now only heightened by the spate of ships and crews hijacked in Somalia. So while things can look to be very promising, as Mr. Levene observes, the reality is that nothing is without its risks.