aviation canada - insurance penetration

8/7/2019 Aviation Canada - Insurance Penetration

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Market

Presentation:

Canada

February 2010

Deborah Moor

Lloyd's Canada

www.lloyds.com/MARKETPRESENTATIONS
http://www.lloyds.com/MARKETPRESENTATIONShttp://www.lloyds.com/MARKETPRESENTATIONS


2/29

Lloyds

Con

ten

t 1Market Overview

Lloyds Canadian

business2

Lloyds Canada 3

conclusions 4


3/29

Lloyds

Market

Overview


4/29

Lloyds

50

100

150

200

250

300

350

400

US Germany UK France Canada Australia South

Africa

0%

1%

2%

3%

Directpremiums

nonlife2008

Marketpenetration

(aspartofGDP)

Source: Market Intelligence calculations based on Sigma 2009 SwissRe

TotalCanadianinsurancemarketaccountsfor3.2% ofglobalinsurancedirectpremiums

Thepenetration

of

non

life

insurance

is

similar

to

that

of

other

developed

countries

TotalNonlifeDWP2008(GBPbn)

Forecasted

CAGR

GDP

2008

2013

4.6% 4.3%4.1% 3.6%

8th biggestmarketintheworld

2.8%3.8%

CANADA >Overview

8.4%

1


5/29

Lloyds

Marine1%

Aviation 1%

Liability

11%

Other7%

Motor

52%

Personal

Prop15%

Commercial

Prop 13%

TheCanadianP&Cmarkethasdoubleditssizein10years,ledby expansioninmotorpremiums

Specialtyclass

premiums

have

shown

less

growth

Source: Market Intelligence calculations based on P&C Canada 2009 Market Share Report - MSA Research Inc. www.msaresearch.com and OSFI www.osfi-bsif.gc.ca/

2.4times

1.7times

2.1times

2.1times

CANADA >Insurancemarket

Nochange

Nochange

Liability

10yeargrowth

Other*

Marine

TotalProperty

Motor

Aviation

CanadaNonlifemarket2008

GBP

22.1bn

1

*Otherinclude:Accident&Sickness,Title,Surety,Mortgage,LegalExpense,Hail,Fidelity,Credit,

CreditProtection,

Boiler

and

Machinery

*
http://www.msaresearch.com/http://www.osfi-bsif.gc.ca/http://www.osfi-bsif.gc.ca/http://www.msaresearch.com/


6/29

Lloyds

Ontariomarketisthelargestbyaconsiderablemargin

Westernprovinces

have

seen

greater

growth

CANADA >Regionalsnapshot

Alberta

Ontario

Quebec

BC

MARKETSIZE*

SHAREOFGWP*

GBP1.7bn

16%

MARKETSIZE*

SHAREOFGWP*

LINESOFBUSINES(GBPm)

GBP1.6bn

15%

8%2%

30%

6%13%

543 400 23 6 386

MARKETSIZE*

SHAREOFGWP*

GBP2.0bn

19%

MARKETSIZE*

SHAREOFGWP*

GBP4.1bn

38%

LINESOF

BUSINES

08

(GBPm)

484 513 32 52 365

LINESOF

BUSINES

(GBPm)

551 768 40 29 401

LINESOFBUSINES(GBPm)

820 1276 4937 1141

2%13%

3% 1%10% 1%

16% 18%

5%

6%

1% 2% 2% 1%

5%

CommercialProp.

PersonalProp.

Aviation

Marine

Liability

GROWTH07/08 GROWTH07/08

GROWTH07/08 GROWTH07/08

*

Excluding

MOTOR

&

RI

MARKET

SIZE*

GBP10.7bn

Source: Market Intelligence calculations based on P&C Canada 2009 Market Share Report - MSA Research Inc. www.msaresearch.com

1
http://www.msaresearch.com/http://www.msaresearch.com/


7/29

Lloyds

Lloydswritesprimarilycommerciallines,settingitapartfromthelargestdomesticcompetitors

andresulting

in

better

profitability

in

recent

years

KeyLloydscompetitors

CommercialLines premiumsandprofits2008(inGBPbn)

KeyLloydscompetitors

Linesofbusinessbreakdown2008

CANADA >Keyplayers(excludingmotorbusiness)

46

41

107

10

48

42

62

40

189

34

294

377

383

405

470

496

517

751

756

881

0 200 400 600 800 1000

Directpremimus notincludingMotor

Totalunderwritingprofits

0% 20% 40% 60% 80% 100%

PersonalProperty CommercialProperty

Liability Marine

Aviation Other

46

41

107

10

48

42

62

40

189

34

294

377

383

405

470

496

517

751

756

881

0 200 400 600 800 1000

CHUBB

NORTHBRIDGE

ECONOMICAL

RSA

AXA

AIG

COOPERATORS

AVIVA

LLOYD'S

INTACT

DirectpremiumsnotincludingMotor

Totalunderwritingprofits

0% 20% 40% 60% 80% 100%

PersonalProperty CommercialProperty

Liability Marine

Aviation Other


1

CHUBB

NORTHBRIDGE

ECONOMICAL

RSA

AXA

AIG

COOPERATORS

AVIVA

LLOYD'S

INTACT


8/29

Lloyds

CanadahasdifferentdriversthantheUSandUKmarkets

Canada >MarketCharacteristics 1

Manyforeign players alldirectwritersarefullylicensed

UKlikeliability climate

Relativelylowrate environmentversusUSsurpluslines

Stable butslowgrowingeconomy

Largestinsurers

burdened

by

personal

lines woes

Performanceincommerciallinesstillpositive butsomedeteriorationinclaims

trends incommercialproperty

Fragmented andregionalised market

Brokerdominated market 74% ofnonautobusinessissoldviabrokers

Aon andMarsh arebigbutsignificantbusinesscontrolledbylocalbrokers

ImportantroleplayedbyMGAs effectivelyfunnelling localbusinesstoLondon


9/29

Lloyds

Lloyds

Canadian business


10/29

Lloyds

58%

81%

85%

62%

59%

42%

19%

15%

38%

41%

France

Australia

Canada

UK

US

Source: Market Intelligence calculation based on Xchanging figures

CanadaisLloyds3rd largestmarket

Incontrast

to

other

territories,

Lloyds

is

primarily

adirect

writer

in

Canada

2008Reinsurance

2008Direct

2.8bn

0.8bn

0.5bn

Lloydspremiums(inGBP)

0.4bn

6.5bn

LloydsTop5territories

Lloyds >Canadaincontext 2


11/29

Lloyds

7

8

8

8

7

8

10

9

8

9

5

6

5

7

7

7

6

7

9

9

3

2

3

2

3

3

2

3

5

4

0 6 12 18 24

Canada

HongKong

Singapore

Italy

SouthAfrica

Spain

Germany

NordicRegion

UK

Australia

InterestedindevelopingbusinessasawholesalebrokerInterestedindevelopingcoverholderbusinessInterestedinotherdevelopment (e.g.retaildev,localoffice)

10

11

10

12

11

12

12

14

14

15

1

2

1

2

2

2

1

0 6 12 18

Kentucky

SouthAfrica

Brazil

NordicRegion

China

HongKong

Singapore

Canada

Australia

UK

Activeincountry,stronginterestindevelopingbusiness

Notyetactiveincountry,stronginterestinenteringthemarket

Source: Market Survey 2009 Based on feedback from 38 Managing Agents and 19 of the top 30 Brokers

ManagingAgents DevelopmentInterests ManagingAgents DistributionInterests

Brokers DevelopmentInterests Brokers DistributionInterests

Lloyds >CEOSurvey Marketappetite

BothmanagingagentsandbrokershaveexpressedstronginterestinCanada

2

14

11

15

11

12

13

18

16

19

23

2

5

2

6

5

5

1

4

2

2

0 7 14 21 28

Singapore

Germany

Spain

NordicRegion

France

Brazil

Canada

Italy

Australia

UK

Activeincountry,stronginterestindevelopingbusiness

Notyetactiveincountry,stronginterestinenteringthemarket

20

21

22

22

21

21

22

22

21

21

12

12

12

10

13

13

12

14

14

17

1

2

1

1

1

2

3

0 7 14 21 28 35 42

UK

Kentucky

Austria

Brazil

France

Germany

Netherlands

NordicRegion

Australia

Canada

Interestedin

developing

brokered

business

Interestedindevelopingcoverholderbusiness

Interestedinsettingupaservicecompany


12/29

Lloyds

Lloydshasunequalledmarketpositioninthelargestcommercialclasses

Underwritingcontinued

to

perform

well

in

2008

Majorlinesofbusinessbreakdown2008*(inGBPm)

Lloyds >Linesofbusiness


2

*NOTES:

This

figures

does

not

include

Reinsurance

premiums.

DWP08

DWP07

Market

Share

LossRatio

2008

8.7%

12.6%

18.3%

33.6%

1.3%

48%

59%

29%

66%

57%

Ranking

2008

29

204

252

28

43

51

244

317

47

27Marine

Personal

Prop

Aviation

Commercial

Prop

Liability

1

1

1

1

16


13/29

Lloyds

WhilstOntarioisstillthelargestrevenueproducerforLloyds,Lloydsisoverweight inWestern

Canadain

direct

business

Lloyds >Regionalposition

LLOYDSSIZE08 GBP174m

RANKING*

*ExcludingMOTOR&RI

CommercialProp

Liability

PersonalProp

LloydsCanada

1

GBP64m

GBP59m

GBP28m


RANKING*

Liability

CommercialProp

Aviation

7

GBP55m

GBP40m

GBP12m


RANKING*

Liability

CommercialProp

Aviation

4

GBP122m

GBP48m

GBP10m


RANKING*

CommercialProp

Liability

Aviation

1

GBP66m

GBP58m

GBP10m

AlbertaOntario

Quebec

BC


2

Reinsurance GBP6m Reinsurance GBP18m

Reinsurance GBP61mReinsurance GBP5m

2


14/29

Lloyds

Approximately52%ofLloydsdirectbusinessiswrittenviacoverholders

BCgenerates

smaller

coverholder risks

whilst

AB

generates

premium

from

larger

open

market

risks

Lloyds >Distribution

YT

NTNU

QC66

ON102 NB

4 NS3

NF6

PEI

MB4

SK5

AB24

BC76

Montreal

Toronto

YT

NTNU

QC66

ON102 NB

4 NS3

NF6

PEI

MB4

SK5

AB24

BC76

Montreal

Toronto

LLOYDSDWP08

SHAREOFDWP

GBP168m

9.8%

#CHs

#OMCs

76

34

LLOYDSDWP08

SHAREOF

DWP

GBP112m

5.6%

#CHs

#OMCs

66

38

LLOYDSDWP08

SHAREOFDWP

GBP139m

8.6%

#CHs

#OMCs

24

21

QUEBEC

LLOYDS

DWP

08

SHAREOFDWPGBP

185m

4.5%

#CHs

#OMCs

102

64

ONTARIO

BRITISHCOLUMBIA

ALBERTA

2

Source: Market Intelligence calculations based on P&C Canada 2009 Market Share Report - MSA Research Inc. www.msaresearch.com and Xchanging figures

2


15/29

Lloyds

Thetop10ManagingAgentsaccountfor63% oftotalCanadianpremiums

Portfoliosshow

variation

and

the

largest

writers

write

substantial

binding

authority

books

Typeofbusinesswritten(inGBPm)


Lloyds >TopManagingAgents

ShareofLloydsCanadaPremiums

2008

Linesofbusiness

2

95

63 6046 48

36 3716 20 23

5

7 511 1

6 4

11 5 2

0

20

40

60

80

100

MA

1 MA

2 MA

3 MA

4 MA

5 MA

6 MA

7 MA

8 MA

9 MA

10

Direct Reinsurance

0%

20%

40%

60%

80%

100%

MA1 MA2 MA3 MA4 MA5 MA6 MA7 MA8 MA9 MA10

All

Property

Liability Aviation Marine Other

MA8,3%

MA9,3%

MA10,3%

REST,37%

MA7,5%

MA6,5%

MA5,6%

MA4,7%

MA3,8%

MA2,9%

MA1,12%

Lloyds 2


16/29

Lloyds

Afewmanagingagentshavechosentoestablishlocalpresencestosupportorexpandtheir

existingbusiness

MosthavechosentolocateindowntownToronto

Lloyds >Establishmentsontheground 2

CATLIN

Servicecompanywriting

widevarietyofbusiness

fromtwooffices

MARKEL

Own100%ofMGAElliott

SpecialRisks

ACE

Servicecompany

writing

reinsurancerisks

QBE

Businessdevelopment

office

IRONSHORE

Applyingforservice

companystatus

Calgary

Toronto

Montreal

Lloyds 2


17/29

Lloyds

Top10LloydsBrokersaccountfor70% ofpremiums

Mixof

larger

risk

management brokers

and

London

market

binding

authority

specialists


Lloyds >Distribution

Typeofbusinesswritten(inGBPm)

ShareofLloydsCanadaPremiums

2008

Linesofbusiness

2

0%

20%

40%

60%

80%

100%

BR1 BR2 BR3 BR4 BR5 BR6 BR7 BR8 BR9 BR10

AllProperty Liability Aviation Marine Other

9576 69

42 42 39 38 3321 26

29

33

9

1

6

0

25

50

75

100

125

BR1 BR

2 BR

3 BR

4 BR

5 BR

6 BR

7 BR

8 BR

9 BR

10

Direct Reinsurance

REST,30%

BR8,4%

BR

9,

3%

BR10,3%

BR7,5%BR6,5%

BR5,5%

BR4,5%

BR3,10%

BR2,

14%

BR1,15%


18/29

Lloyds

Lloyds

Canada

Lloyds Canada R l i & C li

3


19/29

Lloyds

Bindingauthority

PartXIIIoftheInsuranceCompanies ActhasclarifiedthedefinitionofinsuringinCanadaarisk

nowbasedonlocationofunderwritingactivitynot locationofrisk

Inordertocomply,LloydswillwriteallbusinessinCanada accordingtothenewapproach

InsuringinCanadaarisk

MeetsnewAdvisoryrequirements

givennatureofcoverholder

authorities

MadeinCanada wordingmustbe

includedonallpolicyholder

correspondence

Anybusinesslocatedoutsideof

CanadawrittenbyCanadian

coverholders

must

be

reported/fundedasinCanada

Anycoverholdersalsowritingopen

marketrisksoutsideBAcontracts

mustsignOMCundertaking


MeetsnewAdvisorygiventhekey

activitiesperformedbytheCanadianOpen

MarketCorrespondentbrokersonbehalf

ofLloyds:

Collectingpremiumsfrom

Canadianpolicyholders

Deliveringconfirmationof

coveragetoCanadianpolicyholders

AllOMCs

must

have

signed

undertaking

confirmingtheirperformanceofthese

activitiesonbehalfofLloyds

Reasonableeffortsmustbemadeto

separateCanadianelementfromGlobal

Policiesandreportseparately,with

CanadianOMC

performing

key

activities

above

ReinsuranceOpenMarket

ImpactonLloydsBusinessinCanada:effective1.1.2010anappropriatelylicensedCanadianintermediarymust

beinvolvedinallLloydsCanadianbusiness (seeMarketBulletinY4329fordetails)


MeetsnewAdvisorygiventhekey

activitiesperformedbytheCanadian

reinsuranceintermediariesonbehalfof

Lloyds:

Collectingpremiumsfrom

Canadianpolicyholders

Deliveringconfirmationof

coveragetoCanadianpolicyholders

AllRIs must

have

signed

undertaking

confirmingtheirperformanceofthese

activitiesonbehalfofLloyds

Reasonableeffortsmustbemadeto

separateCanadianelementfromGlobal

Policiesandreportseparately,with

CanadianOMC

performing

key

activities

above

Lloyds Canada >Regulation&Compliance 3

Lloyds Canada Offi F iliti & F ti

3


20/29

Lloyds

Lloyds Canada >OfficeFacilities&Functions

LloydsnewTorontoofficewillprovideflexiblefacilitiesinTorontosbusiness&insurancedistrict,

raising

Lloyds

brand

profile

in

Canadas

largest

business

centre

NEWOFFICE

TORONTO 200BayStreet,RoyalBankPlaza

DeborahMoor,President

SeanMurphy,

VP

&

Attorney

in

Fact

Keyroles

Regulatorystrategy&management

Lloydspromotionandmarketdevelopmentsupport

Operationaloversightincludinglocalcompliance

Facilities

Hotdesk/Meeting/Presentationfacilitiesforvisiting

ManagingAgents&Brokers

Smalltomediumreceptions

Contactdetails

Phone:+1

(416)

6448638

email:[email protected]

MONTREAL 1155RueMetcalfe,SunLifeBuilding

LuciePayette,Sr.OperationsManager

NatalieStipetic,BusinessAnalyst

MaryArabian,ComplianceExecutive

TELUS

Keyroles

AttorneyinFactoffice(incl.coverholders&OMCs)

Lineageoperationsmanagement&control

Lineagecustomerrelationships&training

Facilities

MeetingfacilitiesforvisitingManagingAgents&Brokers

Contactdetails

Phone:+1(514)8618361

email:[email protected]

3

Lloyds Canada > N t t 2010 3
mailto:[email protected]:[email protected]:[email protected]:[email protected]


21/29

Lloyds

Lloyds Canada >Nextsteps2010 3

Wearearesourceforthemarket

LloydsCanadawillcontinuetoworktoexpandLloyds(andLCs)profileinCanada

Torontoofficeopening

Coverholdergroupgatherings

Individualcoverholder&OMCmeetings

Industryassociationparticipation

Participationinnetworkingevents&conferences

Continuetobuildourknowledgeofthemarketplaceandyourplansforbusiness

development

TakedirectionastohowwecansupportyourambitionsfortheCanadianmarket


22/29

Lloyds

conclusions

Canada > Conclusions 4


23/29

Lloyds

LloydssuccessinCanadaprovideschallengeforfuture wheredowego

fromhere?

Canada >Conclusions 4

Product

ArethereattractivenicheswhereLloydsdoesnotcurrentlyparticipate,i.e.lineswhere

thereisadissatisfactionwiththelocalofferings?

Thereisalarge&strongnetworkofbrokers&MGAs inCanada canrelationshipswith

Canadianbrokers&coverholdersbestrengthened/broadened?

Distribution

ThereisnoregulatoryimperativetobeonthegroundandLloydshasdoneverywellfrom

London,withnodistinctivetrendforlessbusinesscomingtoLondon

Isthere

good

business

that

it

is

not

currently

accessing?

Canada > Conclusions 4


24/29

Lloyds

Canada >Conclusions 4

MarketConditions:ratescontinuetostagnate,butCanadianmarkethasa

favourableliabilityclimateandrelativelysmallcatastropheexposure

Lloydsisgettingsomeopportunitiesasmanydomesticsarecapacityconstrainedfollowing

Ontarioautolosses

Lloydslicensedpositionhasbeenpreservedwithkeypartnershiprole with

Canadianbrokers

reinforced

LloydssuccessinCanadaprovideschallengeforfuture wheredowego

fromhere?


25/29

Lloyds

Lloyds Canada > 2010 Events & Activities


26/29

Lloyds

KEYINDUSTRYEVENTS

ALBERTA CanadianRisk&InsuranceManagementSociety2010

Location: Edmonton

Time: September2010

QUEBEC NationalInsuranceConferenceofCanadaLocation: MontrealTime: October2010

ONTARIO InsuranceBrokersofOntarioAGMLocation: TorontoTime: October2010

QUEBEC RCCAQ InsuranceBrokersofQuebecAGM

Location:

MontrealTime: November2010

BRITISHCOLUMBIAInsuranceBrokersAGMLocation: VictoriaTime: May2010

LloydsCanadaiscommittedtobuildingitsunderstandingof,andresourcestosupport,managing

agents marketdevelopmentobjectivesinCanada

LLOYDSEVENTS&WORKINGGROUPS

TorontoOfficeOfficialOpening

Location/Time:Toronto/tbd:H22010CanadianCoverholderMeetings

Location/Time: Toronto,Montreal,Vancouver&Edmonton/SepOct2010

LineageCanadianUserGroupMeetings

Location/Time: London/asrequired

LineageLondonUserGroupMeetings

Location/Time: London/asrequired

Canada

Regulatory

Change

Working

GroupLocation/Time: London/asrequired

OTHERRESOURCES

MSAResearch

StatisticsontheCanadianP&Cindustry

>www.msaresearch.com

OfficeoftheSuperintendentofFinancialInstitutions

>www.osfibsif.gc.ca

MEMBERSHIPS

InsuranceBureauofCanada

PolicyinCanadaWorkingGroup

RegulatoryAffairsCommittee

ReinsuranceResearchCouncil

CanadianBoardofMarineUnderwriters

InstituteforCatastrophicLossReduction

Canada UKChamberofCommerce

NuclearInsurers Association

Lloyd s Canada >2010Events&Activities

Appendix > Lloyds business by province
http://www.msaresearch.com/http://www.osfi-bsif.gc.ca/http://www.osfi-bsif.gc.ca/http://www.osfi-bsif.gc.ca/http://www.osfi-bsif.gc.ca/http://www.msaresearch.com/


27/29

Lloyds

Appendix >Lloyd sbusinessbyprovinceLinesofbusiness 2008 B.COLUMBIA ONTARIO QUEBEC ALBERTA

DWPGBPM 28 7 6 1Marketshare 5% 0.5% 0.7% 0.2%

Lossratio 46% 48% 106% 70%Ranking 7 23 14 27

DWPGBPM 64 48 40 65Marketshare 13% 6% 7% 12%





Lossratio 37% 21% 43% N.A.Ranking 1 2 3 1



Others DWPUSDM 5 1 2 120.51FOREXRATE08GBPtoCAD

Liability

Marine

Aircraft

PersonalProperty

CommercialProperty


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aviation canada - insurance penetration

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