Recent years have seen Latin American Cargo business increasingly being placed into London as clients become more educated about their risks and seek specialised, competitive insurance products.
That is certainly the experience of the Cargo team at JLT Specialty, says Senior Partner Edward Page-Turner: “Our business in LatAm has grown exponentially over the last four years. We started with four clients and now have more than 80, and gross written premiums have risen ten fold.”
“Travelling extensively throughout the region has been key to this increase,” says Edward, along with having a strong local broking network. JLT Latin America has 29 local retail and reinsurance offices, and more than 700 staff.
So why is Latin American business coming to London? “The main reason is that clients are being attracted by new concepts of insurance that are not familiar in Latin America, such as stock throughput and even stock-only insurance,” says Edward.
While the London/Lloyd’s brand is an obvious attraction, its relevance can be supressed because of how business is placed locally, he says: “Latin American business is generally placed into London by way of reinsurance. Notwithstanding that brand and product is a clear differentiator, clients will continue to place their business locally as legislation dictate payment by recoverable losses irrespective of reinsurance arrangements.”
In terms of what drives Latin American clients, Edward says that it is a combination of product and emphasis to price – and depends on the country. “In Chile, for example, clients are a lot more technically orientated when it comes to risk, whereas in Brasil, Colombia, Ecuador, Panama and Peru, price remains the driving force.”
Because Chile has one of the most developed insurance markets in the region – predominantly driven by the need to buy catastrophe cover for earthquake and tsunami – it generates strong demand. In fact, Edward says that fifty per cent of his team’s gross written premium comes from Chile.
He adds that the Brazilian market is interesting because it is driven by legislation that protects traditional modes of insurance. Therefore, while clients might want to purchase products like stock throughput, they are not allowed to by the local regulator, SUSEP.
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For more information please contact Edward Page-Turner, Senior Partner in the Cargo team on +44 (0)20 7466 6543