Tagged: Asia, Lloyd's, specialist, underwriting

This was published by Lloyd’s Asia Pacific, July 2006

Philip Bilney is an Executive Director at FP Marine Risks, the first Asian broker to receive full Lloyd’s accreditation in its own right. He heads up FP Marine Risks’ Hong Kong Office.

Q1: Why and when was FP Marine Risks set up?

A1: The company was set up in January 1994. At the time, the Asian marketplace was characterised by multi-national broking houses who maintained very little in-house marine expertise, and certainly not across all marine lines. There were no regional brokers with the skills and knowledge required in this market sector, which created a clear opportunity to set up a specialist marine broker.

We have been able to successfully grow within that marine niche since then, and today we have 33 staff in the Hong Kong office and 47 in total.

Q2: Hong Kong is a competitive market – how does FP Marine Risks stand out?

A2: Above all else we differentiate ourselves by remaining focused on our marine specialisation.

All of our tools, resources and processes are designed with that very much in mind, which I think benefits all parties involved.

Many people also comment on the energy and drive of the company. There is a sense of urgency in the place, which I think is vitally important to clients.

Q3: What classes and areas do you specialise in?

A3: All marine classes and all Asian countries. As might be expected, we are finding that China and India are attracting most attention these days, but the rest of Asia Pacific shouldn’t be ignored. There is growth almost everywhere in the region.

Q4: Why did you apply for Lloyd’s broker accreditation?

A4: As individuals we came from a Lloyd’s background so it was an easy decision for us, particularly given Lloyd’s’ pivotal role in our business.

This was further reinforced by the fact that we were keen to be able to conduct our dialogue with the Lloyd’s market without the need to involve third parties, which meant of course having a direct presence in London.

Q5: What do you find is the perception of Lloyd’s in the local market?

A5: Lloyd’s has the best brand and the best name recognition in the business. Perhaps because of that some Asian buyers of insurance perceive Lloyd’s to be expensive, even though we all know that isn’t necessarily the case. So we sometimes have to overcome that obstacle.

There is also a certain mystique about Lloyd’s, making it appear perhaps rather elitist, which can actually help to attract business sometimes. But at the end of the day, price considerations almost invariably prevail.

The insurance market in Asia tends to see Lloyd’s as remote and a little aloof. However more recently there has been a realisation that Lloyd’s has been modernising rapidly and becoming more professional. Lloyd’s chain of security is generally recognised as a powerful asset.

Q6: You have just received your full accreditation as a Lloyd’s broker – how will this help your business?

A6: It demonstrates that we have placed substantial and growing amounts of business into Lloyd’s over the last three years. It also shows that we have met the standards of Lloyd’s brokers, and from a Hong Kong perspective this demonstrates professionalism and credibility.

There are a number of current London market initiatives, such as contract certainty, which of course we buy into as a Lloyd’s broker. But we have also made a conscious decision to extend the same initiatives into Asia – we want to deploy these improvements in professional standards as widely as possible.

Q7: FP Marine Risks opened a London office – why was this?

A7: We opened the office in London in August 2003 as we knew we needed it in order to operate effectively as an accredited broker. We found it essential to have a presence on the ground, and since then have been able to recruit a number of specialist brokers in our office there.

We have two routes to Lloyd’s underwriters – the first is directly from Hong Kong by email to underwriters in the Room. Some underwriters have been adept at changing their own practices to accommodate this and in practice can work with us in the same way that a local underwriter can – a Lloyd’s underwriter who replies to us first thing in the morning in the UK will sometimes have responded more quickly than his Asian-based competitors. This is important to us and has worked well.

The second route is via our brokers on the ground in London. Dealing directly with a broker 7,000 miles away from Lime Street requires a particular mindset, so we find having the two approaches essential.

We now have 12 people in London and nine who regularly walk around the Room, which has had a massive impact on our profile in Lloyd’s. Having a fully operational London office also sometimes presents us with new business opportunities – being Asian specialists we often get referrals and enquiries related to the region.

The more we become engaged in London the more it becomes apparent that London and Lloyd’s remain the epicentre of marine insurance. There is tremendous value in the way Lloyd’s operates – it enjoys a unique physical marketplace that is just not found in other centres around the world.

Q8: Do you see syndicates setting up in Asia having an advantage?

A8: Yes, the syndicates who set up in Asia are in the front-line and as such are much more likely to see a greater choice of risks, and to understand the market better.

It’s worth bearing in mind that marine underwriters operating in Asia are generally doing well. Although rating levels here are often lower than in other parts of the world, claims tend to be as well.

Q9: FP Marine Risks recently set up a Melbourne office – what was the rationale for this?

A9: Australia and New Zealand are markets that suit us perfectly in terms of language and legal systems, and of course they share similar time zones to Hong Kong. But they can also be quite introverted markets, and therefore a presence on the ground is essential. So when the opportunity presented itself we were very keen to quickly establish ourselves.

I’m very pleased to say that the office is doing well – we are seeing business that is of high-quality and well-presented. It’s tremendously exciting.

Q10: What are your predictions for the Hong Kong and regional market for ten years time?

A10: I hope and expect that Hong Kong will still be the key regional Financial Centre for Asia in ten years time – it has all the infrastructure that it needs for that, and many advantages over Shanghai or other cities.

Many people expect China to continue on its path of tremendous growth and reform, and I’m sure that will be the case. But it won’t all be in a straight, trouble-free line – expect many bumps to come. The insurance market there will no doubt continue to develop and open up, and the indigenous insurers will continue to become more sophisticated. The old polarisation of the market into one or two huge players will never return.

Q11: What is the future for FP Marine Risks?

A11: We will continue to be marine specialists – that focus has worked well for us. I see huge and exciting potential for considerably more growth for us in the Asia-Pacific region, and indeed elsewhere around the world.
Philip was in conversation with Alex Faris, Lloyd’s General Representative for Hong Kong

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