Lloyd’s, Chubb Weigh in on Global Insurance Opportunities
The current presidential administration and the U.K.’s exit from the European Union have created uncertainty in the insurance market, and may change the existing landscape of political-risk insurance for the surplus lines arena.
Major insurers in the surplus lines industry have given input on the global climate of the market, but executives of Chubb and Lloyd’s of London have differing opinions on whether recent developments will be a benefit to the industry.
Prior to the presidential election, Chubb Ltd. Chief Executive Officer Evan Greenberg said that the market was too uncertain for insurers to take on more risk, and that he did not view the current global political climate as advantageous to insurers.
However, recently, Lloyd’s of London CEO Inga Beale said in an interview with Bloomberg that the state of the market may provide opportunities where buyers seek coverage to protect against man-made disruptions in commerce.
In Texas, surplus lines insurance policies may include provisions that guard against terrorism, riot, or war risk, but political-risk insurance is more inclusive when it comes to this type of hazard. For example, it shields against the risk that an investor will face a financial loss based on the actions of a government or political event. Political-risk insurance can also protect against expropriation, political violence, the inability to convert currency, and even terrorism and war.
Much remains to be seen; however, it is apparent that the surplus lines market will be prepared to be innovative and responsive to this type of advancement.