Fewer than half of st
are insured. But art olen works
up to $4bn a year, sacrime costs
ys the FBI
INSIDE: ART TH
EFT –
THE FULL PICTU
RE
p24
THE EARTHQUA
KE EQUATION:
SPECIAL REPORT
SPACE INSURA
p10
NCE – THE NEW
FRONTIER p18
THE UK, THE EU
AND THE LLOYD’
S ADVANTAGE
UAVs: RISE OF
p20
THE MACHINES
p28
SPRING 2014 WW
W.lloyds.com
03
Some of
the most
interesting
risks, and
potentially
the most
catastrophic,
are out of
this world
SPRING 2014 www.lloyds.com
Regulars
05 INTRODUCTION
We welcome you to Market magazine
and tee up this issue’s top stories.
SPACE INSURANCE:
NEW FRONTIERS p18
Features
EARTHQUAKES: SPECIAL REPORT
New ways architects are designing for disaster; whether fracking
causes temblor troubles; how emotion colours our attitudes to risk;
cutting-edge prediction technology; plus forecasting the future.
20
06
FORESIGHT
SPRING 2014 www.lloyds.com
Published on behalf of Lloyd’s (www.lloyds.com)
by Sunday (www.sundaypublishing.com)
If you would like to contribute to the next issue,
please email marketmagazine@lloyds.com
COVER ILLUSTRATION BY SCOTT WOTHERSPOON
Care has been taken to ensure accuracy of information, but neither
Lloyd’s nor the publishers can accept responsibility for omissions or errors.
Lloyd’s is regulated by the Financial Conduct Authority and the Prudential
Regulation Authroity. © Lloyd’s 2014.
INTERVIEW: SEAN McGOVERN
We talk to Lloyd’s Director of Risk
Management and General Counsel
about why it makes market sense for
the UK to remain part of the EU.
News from the market, including:
the challenges of providing cover for HS2;
why body art is big business Down Under;
Lloyd’s new partnership with China’s Nankai
University; and the opportunity to write more
supply chain insurance in Asia-Pacific.
24
COVER STORY:
ART THEFT
They sound like the stuff of Hollywood
heist movies. But thefts of masterpieces by
so-called master criminals are all too real,
costing up to $4bn each year…
28 THE RISE OF THE MACHINES
Until recently, they were used only for
weaponised strikes on military targets,
or public safety and law enforcement.
From satellites and meteors to solar
storms and commercial space flight.
But now the market for the commercial
deployment of unmanned aerial vehicles
(UAVs) is opening up – with applications
that could be worth billions of dollars.
34 THE GREAT EXHIBITION OF LYON
33 THE INTERNET OF THINGS
How a grand event in 1914, insured for
3mFF, turned into a catalogue of disasters.
By 2020, 26 billion objects will be
connected to the internet, delivering
18 SPACE RISK
35 MARKET UPDATE
Upcoming events and international
contacts at Lloyd’s.
23 LIQUID ASSETS
By 2050, water stress is predicted to reach
unprecedented levels. And insurers can play
a part in promoting greater responsibility.
real-time information on every aspect
of our lives. And this big data has the
potential to revolutionise the way
insurance models work.
05
Statistics Relating to Lloyd’s
2014 edition – order now
Order a copy of the 2014 edition of this unique guide,
containing key facts and figures about the Lloyd’s market,
published in May 2014.
The guide includes a summary of financial statements
and the historical performance of all active syndicates,
plus detailed statistics on capacity, premium income,
claims, loss ratios, and much more.
Pre-order your copy today or find out more at
www.lloyds.com/stats
“In Turkey
we found that,
because people
do not trust
their buildings
to withstand
any shaking,
then why
do anything
to prepare”
HELENE JOFFE,
UNIVERSITY
COLLEGE LONDON
Between 2000 and 2012, there were 813,856 earthquake fatalities worldwide.
In the US there were just two – despite the fact that, during this timeframe, it
experienced more than 80 temblors with a magnitude of six or more.
Better buildings, infrastructure and emergency responses all played a key role
in the lower death toll. Clearly then, there is much that can be done to mitigate
earthquake risk. And in this issue (page 10), we explore the latest advancements
– from developing a better understanding of the emotional factors that drive
inaction in the face of disaster, to new, quake-proof construction methods.
Our cover story (page 24), meanwhile, delves into the murky world of art
theft, where losses are estimated at up to $4bn annually. It’s not all the stuff of
blockbuster movies though – the biggest threat to valuable works is often damage.
We also talk to Sean McGovern, Lloyd’s Director of Risk Management and
General Counsel (page 20), about why it’s in the market’s interests to remain
within the EU.
And finally, we examine a burgeoning sector with massive potential for
growth: the commercial deployment of drones. It’s possible that, in the future,
our skies will be crowded with unmanned aerial vehicles, so we get to grips with
the unique risks and regulatory challenges (page 28).
We hope you find this issue interesting. If you haven’t already done so, sign up
to receive Market magazine or enewsletter at lloyds.com/marketmagazine
@LloydsofLondon
lloyds.com/linkedin
lloyds.com
facebook.com/lloyds
Foresight
07
WORDS BY HELEN YATES
ILLUSTRATIONS BY JAMIE PORTCH
INSIGHTS FROM THE WORLD OF LLOYD’S. BY THE MARKET, FOR THE MARKET
HS2: Vital statistics
250mph
Maximum speeds of HS2.
EMERGING RISKS
HS2: FULL SPEED AHEAD
CONSTRUCTION UNDERWRITERS READY
THEIR CAPACITY FOR THE UK’S £40BN
HIGH-SPEED RAIL NETWORK
Last year’s approval of the £42.6bn
HS2 infrastructure project promises
to inject yet more energy into a sector
already buoyed by Crossrail, the Forth
Replacement Crossing and the Thames/
Lea Tunnel – projects that together
represent over £22bn of investment.
HS1, Britain’s only other high-speed
railway, is the stretch of line between
the Channel Tunnel up through Kent
and into St Pancras. It was completed
in two phases over 16 years – with
flooding on section one in Kent and
tunnelling difficulties on section two,
through London, among the insurance
claims. There were also ten deaths during
construction, although that was lower
than the 24 forecast by the government
when it announced the project in 1990.
CONFIDENCE IN UK CONSTRUCTION
This improving safety record is a key
attraction of the UK construction
market for insurers. The 2012 London
Olympics were the first delivered
without a single fatality on any of the
building projects. Besides being a
human tragedy, accidents can mean
delays, which are often costly for insurers.
The Crossrail and Olympics projects
also tested the UK construction sector’s
mettle for ambitious, long-running
programmes, as have projects abroad.
“There’s so much big infrastructure being
built at the moment,”says Paul Knowles,
Construction Broker at JLT. “In Asia,
for example, you’ve got extensions to the
Hong Kong metro, and metros being
built in Kuala Lumpur and Jakarta.”
In China, high-speed rail construction
was temporarily halted following the
Wenzhou train tragedy in July 2011.
Two high-speed trains collided on a
viaduct in the suburbs of Wenzhou,
Zhejiang province, killing 40 people
and injuring 192 as the trains derailed
and four cars fell off the viaduct.
Elsewhere in Asia, it is natural
catastrophes that concern underwriters
and risk managers, according to an
Allianz Risk Barometer, published in
January. “A natural catastrophe can result
in business interruption, systems failure,
power blackouts and a host of other
perils,”commented Axel Theis, CEO,
Allianz Global Corporate Specialty,
at the report’s launch.
CONSIDER THE CAVEATS
Big UK projects are attractive because
they do not bring these problems. Due
to get underway in 2017, the insurance
programme for the first phase of HS2
will soon enter the market. While there
is plenty of capacity and appetite for
this megaproject, there are challenges
to overcome in placing the insurance.
“Duration is a caveat,”thinks Patrick
Bravery, Construction Underwriter at
Talbot.“The project period, which will
be more than five years, will restrict some
people’s capacity and appetite.”
The £15.9bn Crossrail project, the
largest currently in progress in Europe,
broke new ground in terms of insurance
contract duration, according to Arthur
J Gallagher International.The broker
put together the first nine-year policy
without a break clause in the UK –
all placed in the London market.
Another risk, Bravery adds, is
tunnelling.“There will be a significant
amount of tunnelling, some of it through
heavily built up parts of London and
Birmingham, and later Manchester
and Leeds. Tunnelling has a rather
chequered history, less so in the last five
to ten years. But it does still leave people
more cautious and will focus attention.”
The financing of the project could also
prove tricky. Says Knowles: “If private
finance is involved – particularly project
finance – that will have a strong influence
on how the insurances will need to be
structured to protect the interests of the
financiers as they focus on the revenue
stream associated with the underlying
assets, depending upon contractual and
government indemnities.”
Equally, interested parties will need
to be satisfied too – regional authorities,
Network Rail and Transport for London,
as the route will cut across road and
rail intersections. “There will be many
opinions on what the insurance should
or shouldn’t look like,” says Knowles.
£42.6bn
Cost of project.
40,000
Number of jobs the government claims the
London-West Midlands section will generate.
70
Number of groups opposing HS2.
330 miles
Total length of track for phases one and two.
140 miles
Length of London to Birmingham line.
56.5 miles
Section of phase one track that will be partially
or totally hidden.
400 metres (1,300ft)
Average train length.
1,100
Number of seats per train.
49 minutes
Length of journey between London and
Birmingham on HS2. Currently, journey time is
1hr 21 minutes.
1 hr 08 mins
Future length of journey between London
and Manchester on HS2. Currently, journey
time is 2hrs 8 minutes.
Foresight
09
PARTNERSHIPS
UNLOCKING THE
CHINESE MARKET
GET TO KNOW LLOYD’S FROM
THE PEOPLE WHO LOVE IT
Realise the Extraordinary was
launched in January 2014 on
Lloyds.com and showcases
diverse career stories from
across the market and the
Corporation – told by the
people who work there.
The visually engaging digital
hub has been created to
promote the dynamic, vibrant,
challenging and exciting Lloyd’s
workplace – as well as raise
the profile of the insurance
sector as an extraordinary
place to work. Find out more
about this campaign at
lloyds.com/careerstories
NEW UNIVERSITY PARTNERSHIP WILL
IMPROVE LOCAL MARKET INTELLIGENCE
NEW PRODUCTS
BODY ART COVER
CATCHES ON IN OZ
TATTOOS AS A FORM OF PERSONAL ADORNMENT ARE ALL THE
RAGE DOWN UNDER. AND TWO NEW LLOYD’S-BACKED INSURANCE
PRODUCTS ARE TAPPING THE MARKET’S POTENTIAL
In Australia, where one in seven Aussies are currently sporting a tattoo,
body art is big business. The industry grew at a rate of 4.7% annually over
the past five years to reach $93.3m in revenue in 2013-2014, according to
IBISWorld research. There are more than 300 tattoo studios in Australia,
providing employment to more than 2,000 people.
Demand for tattoos has in part been driven by rapid advancements
in technologies related to their removal, particularly lasers. An increase
in legislation around tattoos and body piercing studies has also made
consumers more confident about safety and hygiene in the industry.
Nevertheless, many insurers are reluctant to provide cover for the
industry. To help fill the gap, Australian broker Parmia Insurance has
developed two policies for the sector, underwritten by Lloyd’s. Its
industrial special risks policy provides property cover for tattoo studios,
as well as property owners with tattoo studio occupancies. It also provides
public and products liability, and medical malpractice cover for the sector.
Cover is subject to strict criteria, with unacceptable risks including
criminal conviction and businesses established less than 18 months.
“We have entered into this market knowing full well the risks and
negative connotations,” says Parmia Founder and Director, Danny
Gumm. “Obviously, while we want to help businesses in the tattoo and
body piercing industry gain cover, we also need to ensure each applicant
meets the criteria prior to evaluating their application for insurance.”
One of the biggest challenges for
insurers in China is data transparency
– particularly access to historic claims
and granular hazard information.
Lloyd’s established its reinsurance
operation in Shanghai in 2007 and the
licence was extended to cover direct
insurance by the regulator CIRC in
2010. Now, Lloyd’s is partnering
with one of the country’s leading
institutions, Nankai University, to
build on its market intelligence.
Working with Professor Wei Liu,
Vice Director of the university’s
International Insurance Research
Institute and a member of its
Department of Risk Management
and Insurance, Lloyd’s will support
tailored research to provide more
in-depth understanding about
crucial aspects of the market.
“The partnership was initiated to
provide access to quality Chinese
insurance market information and
analysis, under the circumstance
of a challenging data transparency
environment,” says Eric Gao, Lloyd’s
China CEO. “The tailored research
programmes can also bring added
value to managing agents and the
Lloyd’s market for future product
development and strategic plans.”
INSIGHT AND ANALYSIS
YOU CAN TRUST
MARKET OPPORTUNITIES
BUSINESS, INTERRUPTED
SINGAPORE REGIONAL HUB URGES MORE
SUPPLY CHAIN COVER IN WAKE OF NAT CATS
Major catastrophes in Asia-Pacific
have highlighted vulnerabilities in
supply chains and stepped up demand
for business interruption (BI) cover.
In particular, these events – including
last year’s Typhoon Haiyan and the
Tohoku Earthquake and Thai floods in
2011 – have focused corporates’attention
on the potential for non-damage BI.
The challenge for the local insurance
market is meeting that demand.
“Prior to the devastating floods of
2011, Thailand had not been viewed as
catastrophe-prone,” noted Ravi Menon,
Managing Director of the Monetary
Authority of Singapore, in a recent
speech.“The scale of the floods and the
knock-on effects of natural catastrophes
on global supply chains came as a rude
surprise. The floods damaged more than
7,000 industrial and manufacturing
plants in 40 separate provinces. This
affected countries with significant
manufacturing capabilities in Thailand,
most notably Japan.”
The majority of losses came not
from property damage, but BI claims
arising from disruption to manufacturing
and supply chains. “It is therefore
important that insurers have senior
experts in the region who understand
Asia’s multi-faceted and inter-connected
risks. This will enable the industry to
better price and underwrite regional
risks, and achieve sustained growth.”
In Singapore, traditional BI is readily
available as part of a property damage/
business interruption package.The
challenge, says Iris Teo, CEO, Marsh
Singapore, is securing contingent BI
cover on behalf of clients in light of the
losses associated with large-scale natural
catastrophes.“We expect to see increased
interest and demand for contingent
business interruption and supply chain
protection, as the interdependence
between a company and its suppliers
becomes more widely understood.”
Market Intelligence provides
analysis of the world’s
insurance industry from a
geographic perspective to help
Lloyd’s managing agents,
brokers and coverholders grow
their business internationally.
Compare Countries offers high
level statistics for the economy,
insurance market and Lloyd’s
business, with regional heat
maps illustrating key indicators
for quick strategic overviews.
Country Profiles provide
individual summaries for
Lloyd’s key territories, while
Market Presentations
contain local insights from
Lloyd’s Country Managers on
opportunities and challenges
in their markets. Class Review,
meanwhile, compares Lloyd’s
business with its competitors in
key territories, broken down by
specialty class of business.
And Country Roundup enables
market participants to stay up
to date with Market Intelligence
news and events that regional
offices want to highlight.
For more information visit
lloyds.com/marketintelligence
Earthquake Special Report:
We explore new ways architects are
designing for disaster and whether fracking
leads to temblor troubles. And we look at
how emotion can colour our attitudes to risk,
plus cutting-edge earthquake prediction
technology. We also cast our eyes to the future,
with forecasts for serious seismic activity
WORDS BY EDWARD MURRAY
12 / EARTHQUAKES
13
feeling the risk
RECENT RESEARCH BY PROFESSOR
HELENE JOFFE, OF UNIVERSITY
COLLEGE LONDON, EXAMINES THE
EMOTIONAL RESPONSES PEOPLE HAVE
TO THE THREAT OF AN EARTHQUAKE.
SHE TALKS TO MARKET ABOUT
HER FINDINGS, WHICH WON THE
2013 LLOYD’S SCIENCE OF RISK PRIZE
LIVING ON THE EDGE:
Landslides in Redcliffs
near Christchurch in
February 2011 leave
homes teetering on the
brink of disaster after a
6.3 magnitude earthquake
devastates the region
Earthquakes: nature’s most destructive force
THEY’RE A DAILY OCCURRENCE, AND WHILE THE MILDEST TREMORS GO UNNOTICED, THE MOST VIOLENT TEAR THE
COUNTRYSIDE APART, REDUCE CITIES TO RUBBLE AND GENERATE TERRIBLE PERSONAL AND ECONOMIC LOSSES
Statistics show the deadliest ten
earthquakes between 1980 and 2012
killed more than three quarters of a
million people, while the ten costliest
over this period generated losses of
$557bn. Less than 15% of this was
insured. What is perhaps most
concerning about these figures, is the
difference between where the biggest
fatalities and the highest costs arise.
Although three of the costliest
temblors happened in New Zealand,
they resulted in relatively few fatalities.
In one of the earthquakes no one died,
in the second one person died, and in
the third 185 people lost their lives. The
2004 earthquake in Haiti, however, saw
222,570 fatalities – but did not feature
in the top ten costliest earthquakes. Not
only do the least developed countries
bear the heaviest human toll – they also
have the least cover in place to get them
back on their feet. Swiss Re estimates
the insurance contribution to the Haiti
quake was 1% of the total loss, while the
industry covered 81% of the losses in the
2010 earthquake in New Zealand.
It is clear big improvements could be
made – both in terms of the physical
protection in place, as well as the
insurance safety net that exists to fund
rebuilding in the aftermath of disaster.
From the way we design and construct
buildings to the way we seek to predict
major seismic events, there is much to
do. And it has already begun. In 2000,
the Turkish Government created the
Turkish Catastrophe Insurance Pool
and insisted on mandatory cover for
residential buildings in urban areas.
But, the cover extends only to physical
property damage and not contents,
personal injury or commercial loss.
Similarly, advances have been made
in the fields of architecture and
engineering. But getting the latest
technology implemented into
construction processes in the poorest
parts of the world is a difficult task.
Data from the US Geological Survey
National Earthquake Information
Centre shows that between 2000
and 2012, there were two earthquake
deaths in the US, while globally there
were 813,856. The lower fatality
record was delivered on the back of
better buildings, infrastructure and
emergency responses. It is this level
of resilience that every country in
the world should be aiming for.
MARKET: Why do you think
people in highly seismic
areas do little to protect
themselves against a
potential earthquake?
HELENE JOFFE: “With
more regular threats
like monsoons, you do
find that people prepare.
But when it comes to
earthquakes, those in
affected areas have a
much more complex
response. The fact that
earthquakes have a
very long return period,
coupled with an inability
to accurately predict
them, means people tend
to live with them as a fact
of life. They refuse to let
the ongoing, but non-time
specific threat inhibit
them. The potential scale
of an earthquake also
makes people feel
impotent. There is a
fascinating factor that,
if you feel something is
out of your control, you
think, ‘why bother?’”
MARKET: How different
were the responses from
the people you spoke to in
Japan, Turkey and the US?
HJ: “In all three countries
there is a sense of the
potential loss following
an earthquake, and the
panic and anxiety that
would be elicited if
one strikes. But the
interesting thing is
that in the US there is
“The potential
scale of an
earthquake also
makes people feel
impotent. There
is a fascinating
factor that, if
you feel something
is out of your
control, you think,
‘why bother’”
an extra emotion of awe
and excitement about
potentially witnessing
an earthquake. It is
a minority position,
but it does not exist
in the other two places.
Trust issues are also
central. We found,
particularly in Turkey,
that because people do
not trust their buildings
to withstand any shaking,
and feel they will simply
crumble around them,
then why do anything
to prepare? Residents
in Turkey feel a corrupt
construction sector
means the materials and
techniques used often
undermine the strength
of their buildings, and
they question the point
of trying to strengthen
a building weakened
by poor practice.”
MARKET: Many of
the preparations
that people make are
non-earthquake specific.
What can the insurance
industry do to encourage
people to better prepare?
HJ: “Partly, it’s people
having a sense they can
survive – that earthquakes
are not necessarily
death events. If you’ve
retrofitted buildings, or
built to code, and you
take additional measures,
your survival chances are
quite high. So, what
encourages preparedness
is a sense of self-efficacy
– that there is something
I personally can
do to mitigate the
impact and survive.”
EARTHQUAKE
PREPAREDNESS
Of the people questioned
in each site in Helene Joffe’s
survey, what percentage
adopted adjustment measures?
USA
TURKEY
HAVE EARTHQUAKE PLAN
75
38
27
HAVE EARTHQUAKE INSURANCE
31
23
19
ARRANGED EMERGENCY
COMMUNICATION
54
31
13
HOUSE CONSTRUCTED
TO BE RESISTANT
19
15 13
HAVE RETROFITTED HOME
17 15
0
JAPAN
14 / EARTHQUAKES
15
BASE ISOLATION, A TECHNIQUE THAT PREVENTS OR MINIMISES
DAMAGE TO BUILDINGS DURING AN EARTHQUAKE, HAS BEEN USED
IN NEW ZEALAND, INDIA, JAPAN, ITALY AND THE USA
SMALL
MOVEMENT
OF BUILDING
LARGE
MOVEMENT
OF BUILDING
LARGE
MOVEMENT OF
ISOLATORS
FIXED BASE
FIXED BASES
Superstructures that are coupled directly
with the ground are more likely to experience
lateral movement induced by an earthquake
– and therefore to suffer extensive damage.
ROLLERS
ROLLERS
When a building is isolated from the
ground, resting on flexible rollers (or
bearings), it will only move a little or
not at all during an earthquake.
designing for disaster
ARCHITECTURAL AND ENGINEERING INNOVATIONS,
COUPLED WITH WELL-REGULATED BUILDING CODES,
COULD SAVE COUNTLESS LIVES – AND PROPERTIES
Minutes after the 2008
Sichuan earthquake
struck China, the world’s
tallest building at the
time, the Taipei 101 in
Taiwan, started swaying.
As it moved, a 728-ton
pendulum, suspended
between the 87th and
92nd floors, rocked back
and forth to counteract
the shockwaves and
protect the building.
This counterbalancing
technique is just one
of the approaches that
architects and engineers
are evolving to enable
buildings to maintain their
integrity during quakes.
“Another technique
is to actually isolate
the building from the
foundation system so
that the superstructure
rolls with the earthquake,”
FLEXIBLE PADS
RUBBER PADS
Similarly, flexible rubber pads that work
like a car suspension system allow the
building to adapt to tremors and ground
shifts, with reduced shaking.
explains Michael
Gustafson, Industry
Strategy Manager for
Structural Engineering
at software design
specialist Autodesk.
“Imagine being on top of
a table with roller skates
on. As somebody shifts the
table back and forth, you
actually stay in the same
place because the skates
allow the table to move
underneath you. In the
same way, the building
does not feel all of the
forces because it is moving
and not subject to the full
forces from the quake.”
Turkey’s Sabiha Gökçen
International Airport,
completed in 2009, is
the biggest building in the
world to employ seismic
isolation technology, and
increasingly the technique
is being used in buildings
across the world.
The technique has
proved so successful
that Kubilây Hiçyilmaz,
a seismic engineer with
ARUP, recently blogged:
“Base isolation is
seismic engineering’s
equivalent of seatbelts
in cars – and maybe
more: it’s a lifesaver
and possibly a property
saver. That’s why I
believe base isolation
needs to be made a legal
requirement for most
new non-high-rise
buildings in areas at
risk from earthquakes.”
A third technique is
to incorporate ‘seismic
fuses’ into a building.
This allows some of the
building to dissipate the
earthquake’s energy
and crumple, without
the integral parts of the
structure being damaged.
A wide-scale adoption
of these innovations would
quickly drive down costs
and help engineers to
further develop their
effectiveness. But it is
unlikely wholesale take-up
will be made mandatory.
Instead, engineers,
architects, builders and
insurers must push for
building codes in every
location around the world
to be continually and
gradually improved.
Says John McAslan,
Chairman of John
McAslan + Partners, the
architectural practice that
restored the Iron Market
in Port-au-Prince, Haiti,
following the devastating
earthquake of 2010:
“I cannot stress enough
the need for well-defined
building codes when it
comes to improving the
global benchmark for
earthquake resilience
in construction. And the
importance of ensuring
that, while there are
codes in place, people
follow them.”
does fracking cause earthquakes?
SEISMIC ACTIVITY IN TEXAS AT THE TAIL END OF LAST
YEAR HAS REIGNITED THE DEBATE. OUR EXPERTS FROM
THE WORLDS OF GEOLOGY AND INSURANCE WEIGH IN…
“The definitive research is
that fracking can cause
earthquakes that are felt.
But the longer answer –
which is important – is that
if you compare fracking to
other processes like mining,
filling dams with water
and, ironically, conventional
oil and gas extraction,
fracking does not make it
into the premier league.
When I talk about fracking,
I am talking about pumping
fluid underground to get
hydrocarbons out.”
“Research suggests fracking
has the potential to generate
seismic activity. In the event
the latter does occur, however,
it can be difficult to establish
a direct link between an energy
company’s fracking activity
and subsequent earth tremors.
It is essential, therefore, that
fracking companies have robust
monitoring procedures to
ensure they know immediately
of any adverse effect from their
operations. This will help
them establish greater clarity
on individual liabilities.”
PROFESSOR RICHARD DAVIES,
DURHAM ENERGY INSTITUTE
CHRIS JONES,
UNDERWRITER, KILN
A HEADS UP FOR INSURERS:
As the scale of fracking activity increases, there may be a greater number of claims made
against the industry – and whether this relates to induced seismic activity or other issues
such as environmental pollution or personal injury, insurers need to ready themselves.
16 / EARTHQUAKES
forecast:
Shaky
FROM THE US AND
EUROPE TO THE FAR
EAST, EXPERTS
ARE PREDICTING
TEMBLOR TROUBLES
IN THE NEAR FUTURE.
HERE ARE THREE
THAT GRABBED
OUR ATTENTION
CALIFORNIA
Global Weather Oscillations
Inc. (GWO) has said California
is most at risk of a major
earthquake in a three-year
period that began in July
2012. GWO generates its
predictions by combining
Meteorology, Oceanography,
Climatology, Geology,
Seismology, Astronomy and
Astrophysics to create a
framework through which it
observes and forecasts.
JAPAN
Russian scientist Alexei
Ryubushin, of the Schmidt
Institute of the Physics of the
Earth, put Japan on high alert
when he presented research
at the European Geosciences
Union Convention in Vienna
in April last year that
suggested the country could
face an earthquake with a
magnitude of 9.0 between
2013 and 2014.
GREECE, ITALY AND TURKEY
Fifty scientists working as
part of the Seismic Hazard
Harmonization in Europe
programme have suggested
countries including
Greece, Italy and Turkey
could bear the brunt of a
major earthquake with a
magnitude in the region of
9.0. Although the group of
scientists gave no timeframe
for this earthquake, they
have produced maps
detailing the most at risk
areas. The research was
released in September last
year, but Greek scientists
have questioned whether
the tectonic plate structure
in Greece could produce an
earthquake of such intensity.
new prediction technology
TO DATE, SCIENCE HAS BEEN UNABLE TO ANTICIPATE WHERE AND WHEN
THE NEXT EARTHQUAKE WILL STRIKE. THIS MAY BE ABOUT TO CHANGE
Scientists can identify earthquake signatures from
electromagnetic and thermal activity prior to a major event.
And they are now working to develop that understanding into
a predictive capability. The UK and Russia, for example, are
partnering on a joint initiative that will send satellites into orbit
to monitor changes in electromagnetic activity – and hopefully
enable scientists to pinpoint the location and time of a strike.
Dhiren Kataria, Head of In-situ Detection Systems at
UCL’s Mullard Space Science Laboratory, explains the
technology behind the TwinSat Project: “During the
earthquake preparation phase, there are a number of things
happening on the surface of the earth that propel
electromagnetic signals into the environment. You can catch
these signals using plasma sensors and electromagnetic field
sensors from space with the advantage that satellites provide
global coverage as opposed to ground-based sensors.”
The challenge is then to isolate this data from similar
signatures created by solar storms and human activity, and
develop a communications network that can issue effective
warnings to areas at risk throughout the world. The goal is to
predict an earthquake with a magnitude upwards of six, hours
and even days before it happens. However, says Kataria: “In
order to build that capability and not make false predictions,
there is a considerable amount of work to be done.”
IUMI 2014
Hong Kong Conference
InterContinental Hong Kong Hotel
21-24 September 2014
This high-profile networking event for the International
Maritime Insurance Sector is a chance for London-based
brokers and underwriters to hear from local experts on
the current market conditions in Hong Kong and the wider
region, and to discuss challenges and opportunities with
industry colleagues. The Chief Executive and President of the
Executive Council of the Hong Kong Special Administrative
Region, CY Leung, will be the keynote speaker.
Find out more at www.iumi2014hk.com or register interest
at www.iumi2014hk.com/register_interest.html
The Lloyd’s Hong Kong office can help with facilitating
introductions to the local market. Contact: +852-2918-9911
IUMI is proudly sponsored by Lloyd’s Agency Department.
18 / INFOGRAPHIC
ILLUSTRATIONS BY SI MACLENNAN
19
27,000,000 TONS
The weight of the asteroid Apophis, which
will cross Earth’s orbit in about 2030. The
probability it will strike us, however, is one in
250,000. On a smaller scale, several thousand
meteorites, each weighing at least 1kg, fall to
earth every year – mostly over oceans.
Space insurance:
the new frontier
Lloyd’s has been a pioneer in the space market
since the 1960s. Here, we explore the insurance
opportunities and risks…
SOURCE: ALLIANZ WHITE PAPER, 2012,
SPACE RISKS: A NEW GENERATION OF CHALLENGES
$700,000,000
$400,000,000
The biggest insured loss in space market history.
In February 2013, the US-made Intelsat-27 took off
from a platform run by Sea Launch, using Russian
Zenit launch systems. The 3SL rocket booster was
destroyed when the satellite fell into the Pacific.
SOURCE: POST ONLINE
The peak value for
insured dual-launch
satellites (two GPS
devices economically
launched on one booster)
in 2013. Around 35
satellites are launched
every year, of which 25
will be insured.
SOURCE: LLOYDS.COM
20,000
1984
After two rogue satellites, insured for £133m,
were launched into the wrong orbit, Lloyd’s
contributed £4.5m toward the cost of their successful
recovery. It paid a further £3.9m for the development
of the ‘Stinger’, a tool which stopped the satellites
spinning and allowed them to be grabbed by the
shuttle’s recovery arm.
SOURCE: LLOYD’S
$700 TO $10,000
The premium range covering cancellation of a Virgin
Galactic suborbital spaceflight trip. Tickets for flights,
scheduled to commence in 2014, cost $250,000.
The number of objects above ten
centimetres in size orbiting the earth.
500,000 items between one and ten
centimetres are too. And there are
tens of millions of other particles
smaller than a centimetre circulating
the planet. All of it is travelling
at several kilometres a second –
sufficient velocity to cause significant
damage to operational satellites.
SOURCE: US STRATEGIC COMMAND’S
SPACE SURVEILLANCE NETWORK
SOURCE: UNIVERSITY OF NEBRASKA-LINCOLN PRESENTATION,
2012, SPACE INSURANCE: THE NEW FRONTIER
$200,000,000
The average value of a satellite in Geostationary
Earth Orbit (GEO). There are approximately
370 active communication, broadcasting and
meteorological satellites in GEO, with a lifespan of
15 years each – around 167 are insured.
SOURCE: ALLIANZ WHITE PAPER, 2012,
SPACE RISKS: A NEW GENERATION OF CHALLENGES
$2,000,000,000,000
The Carrington Event of 1859 is regarded as the
most intense geomagnetic disturbance on record.
If a comparable solar storm struck North America
today, estimates suggest up to 40 million people
could be without power for up to two years. And the
economic cost would be between $600bn and $2tn.
SOURCE: 2013 LLOYD’S SPACE WEATHER REPORT, LLOYDS.COM/RISKINSIGHT
21
“ The EU
debate is
often too
emotional”
Staying within the EU is a rational economic decision based
on where the market’s advantage lies, says Sean McGovern,
Lloyd’s Director of Risk Management and General Counsel
WORDS BY ROXANE MCMEEKEN PHOTOGRAPHS BY JOE MCGORTY
He may be adamant it is in the market’s interests the UK
should remain within the European Union, but Sean
McGovern is no passionate or uncritical Europhile. Indeed,
he has spent the past 17 years working in London at Lloyd’s,
including a stint as North America Director, and he is more
likely to be found sailing off the coast of his hometown
of Brighton than holidaying in the South of France.
The European question could hardly be more pressing
following Prime Minister David Cameron’s promise to hold a
referendum on Britain’s membership of the EU by the end of
2017, if his Conservative party wins the next election.
McGovern, a lawyer by background, believes the current
political and public debate around the issue is far too heated.
“Opponents are often divided on emotional, not factual
grounds and the discussion is frequently ill-informed.”
His calculation that it is in Lloyd’s interests for the UK
to stick with Europe is based on cold, rational analysis. In
reality, he warns, business decisions taken as a consequence
of the UK exiting the EU would be made on “hard-headed,
economic grounds alone”. A recent case in point is a major
US investment bank’s intention, in case of the so-called
“Brexit”, to relocate its London team to the Continent.
So what does McGovern, who oversees legal, government
and regulatory affairs and risk management for Lloyd’s, see as
the consequences for the market
if the UK leaves the EU? First,
he emphasises how important
European business is to Lloyd’s.
Some 15% of its premium income
is from the EU, excluding the
UK. Thus, “any change to the
way we access that income will
have to be looked at carefully”.
The ease of doing business with these countries that Lloyd’s
currently enjoys as a result of being based in an EU member
state is uniquely valuable, says McGovern. “We access
EU countries using the fundamental freedoms of the
Single Market, including the freedom to provide services
cross-border and the freedom to establish in member states.”
This means Lloyd’s can sell both direct and reinsurance
business cross-border into other EU countries, and open
offices there, without having to comply with additional
local prudential regulations. “We simply have to comply
with the regulations of our Home State regulator in the UK.”
AN AUTOMATIC RIGHT TO DO BUSINESS IS INVALUABLE
If Britain were to leave the EU and be outside the Single
Market, it would become a ‘third country’. This would result
in the loss of Lloyd’s current automatic right to do business
throughout the Union based on an EU passport. Instead
it would have to negotiate new license arrangements with
individual EU members, and “it is unlikely there would
be any centralised process for this”, says McGovern.
He adds: “You normally can’t do business in a country
without being established there, including holding some level
of capital and reserves locally, and reporting and filing with
the local regulator.” So, setting all this up in other EU
22 / INTERVIEW
have left us with much better-run
businesses.” McGovern notes that
Solvency II is built on the UK’s
own Individual Capital Adequacy
Standards (ICAS) – introduced in
2005 by the Financial Services
Authority as extra ‘gold plating’
on the EU’s Solvency I regime.
“ICAS is more sophisticated
than Solvency I as it requires you to
model how much capital you need to
cover your risks. It did increase the
regulatory burden, but was mostly
welcomed by the industry.”
McGovern also questions the
notion that the UK would escape
“ The idea
EU regulations if it left the
that regulation Single Market. “Regulations are
increasingly determined at global
in the UK
level, not just coming out of the EU,”
would be
he says. If Britain exited the EU,
easier and less
the UK would still wish to comply
burdensome
with European insurance rules that
if we left the
require ‘third countries’ to show their
EU is fanciful” regulations are equivalent to those of
the Single Market. “The idea that
regulation in the UK would be easier
Member States would mean a significant and costly
and less burdensome if we left the EU is fanciful,” he adds.
upheaval for Lloyd’s and a fundamental change in the
So the UK would have to follow the same rules in practice,
distribution of its business. How long this process might
even if it were not a member state – the difference being it
take is unclear, but there would be a period of uncertainty
would not be able to influence changes to EU regulations.
and disruption, says McGovern. “One can surmise that
That particularly matters to Lloyd’s as, over the years, and as a
brokers, and clients of brokers, may find other carriers
result of intensive lobbying, EU rules have taken legislative
during that time, and there is a risk that, even if we could
account of Lloyd’s unique legal and economic structure and
secure licenses, they may not return.”
business model, to the market’s clear benefit.
McGovern points out that such relationships already exist:
Finally, McGovern points out, leaving the EU would mean
“A number of businesses within Lloyd’s do have insurance
we would no longer be able to shape the trade liberalisation
companies outside the market and they may well choose to
talks and insurance regulatory dialogues with non-EU
write insurance through another part of their group.”
countries, conducted by the European Commission on behalf
of all Member States. To date, the EU has shown itself willing
THE PRINCIPLES OF SOLVENCY II ARE SOUND
to take up issues raised by Lloyd’s. There is no reason to
Would one benefit of the Brexit not be to deliver us from the
suppose that it would be willing to do so in the future if the
perceived perils of Solvency II? “Solvency II gets a lot of
UK was no longer part of the EU. “Who are major economies
negative press because of the uncertainty around when it will
pursuing trade deals with?” McGovern asks. “Not the UK,
be implemented and the cost,” McGovern admits. “And it’s
but the EU – the economic prize is simply not the same.”
true the UK has spent around £2bn preparing for the new
The logic of his argument is hard to deny: Lloyd’s benefits
regime, while Lloyd’s itself has spent in the region of £300m.” from the UK’s membership of the EU as it has a passport to do
However, he argues, “Regulations are not always a bad
business in a region that delivers 15% of the market’s premium
thing. I believe the principles of Solvency II are sound. The
income, the ability to shape regulations the market will be
better management of risk and capital that companies have
subject to, and the opportunity to gain from the trade deals
introduced in order to prepare to comply with the directive
and dialogues with third countries concluded by the EU.
23
WATER STRESS
WORDS BY ANTONY IRELAND
According to Dominic Waughray,
Head of Environmental Initiatives for
the World Economic Forum, some of
the world’s fastest-growing countries
are facing a water shortfall that
Climate change, demographics and economic
could stunt their economic growth.
growth are bringing pressure to bear on the
“To deliver the growth projected under
world’s water resources. And now is the time
business-as-usual water management
for insurers to recognise this systemic threat
practices, most water-scarce countries
are going to need more water than is
safely available. Ergo, they will need
to be much more efficient with the
water they use.” He notes that India
By 2050, the UN predicts the world
faces a gap between supply and usage of 57%, Mexico
population will grow to 9.6bn, while
more than 20% and South Africa 17%.
agricultural production will need to
Ultimately, government-led initiatives will shape future
increase by 60% over 2005 levels to meet
efficiencies. With help from development organisations and
food security needs. Energy demand from the private sector, solutions range from social projects and
hydropower and other renewable energy
water-sharing initiatives between industry and residential
sources will also rise by 60%. Factor in
municipalities, to technological advances. Las Vegas, for
anticipated spikes in extreme rainfall and
example, will soon no longer rely on a drought-affected
droughts, the hardening of ground through floodplain, thanks to a 263-mile pipeline project; UK
urbanisation, and the decreasing resilience scientists have developed ‘drought resistant’ crop seeds that
of wetland, river and lake ecosystems,
can survive on less water; and micro-biologists in the US say
and water scarcity is expected to reach
they can use genetically modified bacteria to generate
unprecedented levels.
electricity from sewage, while also cleaning water for re-use.
Increasing competition for water will
Insurers can play a part. Says Waughray: “Each country
affect all business sectors, from water-reliant has to face some strategic risk management choices: do they
industries such as agriculture, beverages or invest in water-efficient technologies so that every farm can
mining, to retail (whose supply chain could have maximum production with minimum water usage. Or
be disrupted) or financial services (whose
will it be cheaper to invest in an insurance scheme that pays
performance depends on the success of the out when the one in 20-year drought eventually becomes a
companies it invests in or pays out to).
one in four-year event?”
Water stress is also a global problem.
While insurers do provide some
Climate change is creating scarcity and
coverage against water scarcity,
“ The insurance
quality issues in California, Northern
they have yet to fully address the
industry can
Europe, the Middle East, Southern
complexities of the risk in their
Amazon and Australia. And demographics potentially
products. They could also do
and economic growth are putting massive
more to improve risk management
influence
pressure on water supply in Northern
and practices among clients, adds
governments
India, China and sub-Saharan Africa.
Waughray. “It’s the right time to
and corporates
“Governments are becoming aware that
register the link between damage
to be more
their long-term economic future may be
caused by climate change and
responsible”
linked to how well they manage their
the more systemic challenges
resources, rather than whether or not they
of water scarcity and its impact
DOMINIC
have them,” says Guy Pegram, Managing
on economic growth, food
WAUGHRAY, HEAD
OF ENVIRONMENTAL
Director of management consultancy
production and prices. Insurers
INITIATIVES, WORLD
Pegasys, Water Advisor to the WWF
can potentially influence
ECONOMIC FORUM
and author of Global Water Scarcity, a
governments and corporates
2010 briefing on the issue from Lloyd’s.
to be more responsible.”
liquid assets
WATER
STRESS:
IN NUMBERS
40%
Gap between
safe freshwater
demand and
supply by 2030
if there is no
change to water
management
approaches.
SOURCE: WEF
40%
Proportion
of people living
in water scarce
regions by 2025.
SOURCE: GEMI
894m
People without
access to safe
freshwater for
drinking, cooking
and cleaning.
SOURCE: WEF
49%
Projected
increase in
global energy
consumption
(2007 to 2035).
SOURCE: EIA
$109bn
Global annual
GDP loss due
to droughts.
SOURCE: WEF
80%
Chinese water
basins suffering
water shortages
by 2030.
SOURCE: WEF
24 / ART THEFT
25
who stole the art in the first place. The
value of those rewards is tiny compared
with the value of the art itself. “If you steal
a big and valuable work it is very hard to
turn that into cash,” says Read.
Masterpieces,
master criminals
The FBI puts the worldwide cost of crimes linked to art
at nearly $4bn a year – eclipsed only by the drugs and arms
trades. And yet fewer than half of stolen works are insured
WORDS BY CHRIS WHEAL ILLUSTRATIONS BY MIGUEL MONTANER
In the run-up to Christmas, national news broadcast
CCTV footage of a man in a hooded sweatshirt breaking
in to the Exhibitionist Gallery in Notting Hill and making
off with two artworks, Pyronin Y and Oleoylsarcosine, by
Damien Hirst. Together they were said to be worth £33,000.
Robert Read, Global Head of Fine Art at Hiscox, says that
on rare occasions such thefts are to order, because someone
wants these specific works in their personal collections.
But, he adds, the thief often has a different motive altogether.
“It’s like a calling card to the criminal underworld. It does
give you some credibility to turn up to a gangland meeting
with the Mona Lisa under your arm.” Read says criminals
might also use stolen art as collateral for a loan to fund a
different crime altogether.
Charlotte Wilson, UK Specie Underwriter at Catlin,
says high profile, brazen art thefts are unusual. “Often
art is stolen by mistake. It might be in transit in the same
container as a load of perfume the gang is targeting.
The criminal then cannot sell the artwork and the art
happens to be in the way.” Sometimes the art just gets
dumped, or hidden, occasionally finding its way back to
the insurers when rewards are offered.
“The art industry is pretty scrupulous about not paying
ransom. We will offer rewards based on a conviction,”
says Read. Looser rewards are offered for information
leading to the return of the stolen art, providing the police
and insurers are certain the money is not going to criminals
THE ART OF RECOVERY
Michael Burle, Class Underwriter at
Liberty Specialty Markets, says recovery is
the insurer’s problem, not the client’s. “The
priority is the payment of the valid claim.
Because there is an abandonment, any
recovery is in the interest of the insurer.”
That means bringing in specialist loss
adjusters, such as Mark Dalrymple of
Tyler & Co. He has 35 years’ experience
settling multimillion-pound claims, and
recovered prized works of art through
a network of ‘contacts’ within international
crime fighting organisations and elsewhere.
He’s the man who – after piecing together
snippets of information from unconnected
sources handed into police forces that had
not spotted the significance of their tip-off
– might hand over a reward.
Dalrymple insists it is much less cloak
and dagger than it sounds. “The person
claiming the reward is not criminally
involved. Checking that is where the
police come in. There is no question of
us ever meeting under a railway arch
with a brown envelope.”
His most famous case – few are talked
about and Dalrymple never claims credit
– was the Tate’s missing Turners. Stolen
in 1994, insurers led by Hiscox paid out
£24m. Fast forward to 1998 and the
Tate offered to buy back its interest in
the paintings and a deal was struck for
£8m, including Hiscox approving the
secondment of Dalrymple as an adviser
to the Tate’s Trustees.
By the following year, 1999, the three
thieves and their getaway driver had
been convicted. In 2000, the first of
the paintings, Shade and Darkness, was
recovered in utmost secrecy. The second
Turner, Light and Colour, was recovered in
December 2002 when the Tate finally
made the announcement public.
26 / ART THEFT
27
Dalrymple says crossing the
necessary palms with silver had
to be approved at the highest level.
The priority is
“A payment that facilitated the
return of the painting was made
the payment of
to third parties – not the criminals.
the valid claim.
This payment was first approved
Because there is
by a judge in chambers in the
an abandonment,
UK, the federal prosecutor in
any recovery is
Germany, and by the Charities
in the interest
Commission in the UK,” he says.
of the insurer
Dalrymple gets paid for his
claims
settlement work as any
MICHAEL BURLE,
loss
adjuster
would, but works on
CLASS UNDERWRITER,
recovery of stolen artworks on a
LIBERTY SPECIALTY
MARKETS
contingency basis. “If we get a
success, it depends what input
I have had. But within about five
minutes, I have usually agreed
a fee with the insurer that
I think is acceptable,” he says. There are sometimes
private detectives and ex-police officers involved,
as well as the official law enforcement services.
THE WAR AGAINST THEFT
Another player in the war against art theft is the
Art Loss Register, established in 1991. Its Chairman,
Julian Radcliffe, takes a pragmatic approach, arguing
that paying nothing to recover art “would only be effective
if the criminals could not sell the items or use them for
any other purpose and the policy was enforceable
internationally”. Given that is not the case, he says, “it is
necessary to develop a more sophisticated approach”.
There are rules, Radcliffe explains. “The first element is to
prevent the sale of the stolen items for anything like their
true value. To convince the criminal holders that they will
not be able to sell requires a worldwide searching capability
and credibility. This can only be achieved by a team of
25 or so art historian specialist searchers. There have been
a number of cases where criminals have not believed the
reach of the searching, tried to sell, and the item has
been seized – an ideal outcome – or the sale prevented.”
To stop criminals simply hoarding or destroying
unsellable artworks takes incentives. “It is necessary to have
the permission of the police, who are responsible for the
original crime investigation, and ideally the police who have
authority over the intermediary or criminals if their location
is known,” Radcliffe says. Crimes may be beyond statutes of
limitations or hard to prove, so the police can often agree.
“Usually the criminals, with good legal advice, will be
DAMAGE IS THE BIGGEST
THREAT TO WORKS OF ART,
NOT TOTAL LOSS
“Theft always remains sexy, but it’s
not the biggest risk that concerns
underwriters,” says Catlin’s Charlotte
Wilson. The bread and butter claims
come from water damage, fires and
flood, and natural catastrophes.
Insurers want to see wind rooms in
hurricane zones, secure dry buildings
in potential flood zones and proper
plans to get artworks to these safety
zones promptly. They like water sensors
built into walls and artworks raised
off the ground. Most will exclude
subterranean galleries.
A big concern now is the aggregate
risk from the many free ports around
the world housing extensive ranges of
art so it can be bought and sold without
tax. Switzerland claims to be a leader,
with heavy concentrations of art in
Chiasso, Zurich, Basel and Geneva.
But there are others too, such as the
self-styled ‘art fortress’ in Singapore.
Insurers are less convinced.
And insurers have insisted on changes
to how artworks are transported and
stored when not on display, as this is
where many damage claims occur.
“Damage is a big risk, not total loss.
Our loss adjusters know how to
stabilise an artwork and where in the
world to take it to get it restored,” says
Wilson. “That is why customers should
work with fine art insurers and not
property insurers.”
Michael Burle, Class Underwriter
at Liberty Specialty Markets, agrees.
“It can cost £50,000 to repair a rip in
the corner of a painting, yet that tear
might reduce its value. We would pay
for that repair cost and any resulting
depreciation in value.”
able to develop an approach that is low
in risk to them and channelled through
innocent go-betweens who may not
know the identity of the current
holders, and certainly not the original
thieves,” Radcliffe says.
He adds that, “in certain areas of failed
states, or states that are not recognised –
such as Taiwan, Northern Cyprus,
or war zones – there may be no effective
extradition, no police, or the police may
be corrupt. Criminals are adept at using
these locations.”
THE PREMIUM STEAL
Recovering stolen art is a big business
in itself. FBI estimates of the value of
art theft worldwide have hit highs of
$4bn, putting it behind only the drugs
and arms trades. But this figure is now
thought of as exaggerated. According
to the Art Loss Register it is impossible
to truly know. Not all police forces
worldwide keep records and those
that do have different definitions of
what is and is not art. Thefts from private
houses have declined significantly
over the past 25 years in the UK,
but not so much on the Continent.
The reasons for the drop are better
security, locks, safes and alarms – all driven
by insurers – and the reduction in value of
other items that can be stolen at the same
time. Electronic goods aren’t that lucrative,
and those that can be sold are usually
carried in pockets and bags, not left at
home. Europe’s an easier target because of
ownership rules – someone buying a stolen
item in good faith can keep it, whereas in
the UK the buyer loses out and the original
owner has the stolen item returned.
What is clear is that only about half
of the works that are stolen are insured.
Putting a value on the total premium
on art insurance is tricky. Estimates for
the pure fine art cover range as high as
$600m, with $550m more widely quoted.
There are as many as 35 syndicates at
Lloyd’s writing it and new entrants
coming in. “You don’t necessarily see
anybody pull out of the market, but you have seen
two or three new entrants a year in 2012 and 2013,”
says Liberty’s Burle. “There is a bit of loyalty from some
clients but it still comes down to price. There’s not a huge
differential in wordings.”
Catlin’s Wilsons adds: “There is so much capacity, and loss
rates are such that there are low rates and no deductibles.”
There are some galleries and owners who simply will
not buy – public museums may have state backing or be
prevented from buying. There are private owners who
have had valuable works uninsured for years, and see
no reason to buy now – they may be asset rich, but too
cash poor to afford it. Some dealers that do have fine
art policies are suspected of buying too little cover for
their collections. New buyers are coming into the
market, seeing art as a financial investment. All need
to be targeted by insurers.
The major fine art insurers are on a constant round of
conferences and speaking engagements, marketing to
brokers to get across the point that many high net worth
clients ought to have specific fine art policies because of the
more comprehensive cover and claims expertise. Theft is
just part of the picture (see box, left). When it comes to
claims, the fine art premium is a steal.
28 / UAVs
UAVs:
rise
of
the
machines
From mapping and monitoring
to wildlife preservation and
search and rescue, the market for
the commercial use of unmanned
aerial vehicles is opening up
– and throwing up new risks
and regulatory challenges
WORDS BY DAVID WORSFOLD
ILLUSTRATION BY HALF PAST TWELVE
If you take the more excitable
headlines too literally, it won’t be
long before we have a queue of drones
outside our front doors waiting to
deliver our shopping, Christmas
presents, takeaway meals and urgent
medicines. You name it and one day an
unmanned aerial vehicle (UAV) will
be on its way to you – although that
day remains a few years away.
In the hands of the military,
especially the US and Israeli armies,
UAVs have been used extensively
for more than 20 years – mostly
over hostile territory where it would
be too risky to send manned planes
or helicopters. Initially, their prime
purpose was detailed reconnaissance,
but recent years have seen highly
publicised armed attacks deep into the
notorious North West Frontier region
of Pakistan and the neighbouring tribal
areas of Afghanistan. Controlled from
bases hundreds of miles away they have
been used to assassinate some of the
most wanted terrorist leaders – not
without some public disquiet,
including in the US.
A CAUTIONARY TALE
That level of sophistication and
potential for long-distance control
might be throwing up all manner
of potential civil and commercial
uses, but so far aviation regulators
remain extremely cautious.
In the UK, fewer than 300 licences
have been granted by the Civil
30 / UAVs
Aviation Authority (CAA) to operate
UAVs commercially, although the rate
of issue doubled last year and should
do so again in 2014. A key reason for
the low numbers is the restrictions
imposed by aviation regulators on
how and where they can be used.
Around the world the picture
varies enormously. The US Federal
Aviation Authority currently only
authorises UAVs for use by public
authorities and emergency services,
although it has been running a small
test zone in a remote corner of Alaska
looking at civilian uses. At the end of
December, the FAA announced five
further test sites as it rushes to comply
with Congressional demands to
produce comprehensive regulations
for licensing the commercial use of
UAVs by the end of September 2015.
31
Estimates of the value of the
UAV market to the US of between
US$80m and $100m may excite
some, but others remain sceptical,
if not outright hostile.There are
widespread fears about the threat
to privacy, as leading US insurance
and aviation lawyer, Ray Mariani,
explained at a panel discussion in
New York: “Our society still values
privacy, despite the exponential growth
of social media over the past decade or
more … Will [UAV] use become
just one more means of eroding this
and no further than 500m from the
operator for UAVs weighing up to
20kg, with limited permissions
granted for variations from this.
This imposes a huge limitation on
uses, but that isn’t stopping a wide range
of industries looking at their potential,
ready for the day when the rules are
relaxed. As Gerry Corbett, Unmanned
Aerial Systems Programme Lead at the
CAA explains: “We are being invited to
a lot of meetings and get many enquiries
from companies with bright ideas, but
most of them are still very tentative.”
precious commodity? No one contests
that a small [UAV] equipped with a
very high resolution camera can easily
capture our actions while driving,
typing on a laptop on the back patio, or
in our bedroom. Is that presently lawful,
or do we wish to make it unlawful and
therefore need to consider legislation
to forbid such practices?”
While the FAA looks to open up
the opportunities for UAVs, other parts
of the US are heading in the opposite
direction, permitting residents to
shoot them out of the sky. In Deer Trail,
Colorado, they are even holding a
referendum on whether to allow people
to claim a US$100 bounty for every
government-owned UAV taken down.
The UK’s CAA occupies a middle
ground. It does not permit UAVs to
be flown beyond ‘line of sight’of the
ground-based operator and has strict
rules about the heights at which they
are permitted to be flown. Its standard
restriction is no higher than 400 feet
THEY’RE HANDY FOR IRRIGATION
MONITORING IN AGRICULTURE
AND SURVEYING OIL AND GAS
RIGS. AND THEY’RE BEING USED
TO INSPECT POWER LINES,
PATROL AIRPORT PERIMETERS,
AND CAPTURE AERIAL SHOTS
FOR FILM AND TV. THEY’VE
ALSO BEEN FITTED WITH
THERMAL AND VISUAL CAMERAS
AND DEPLOYED TO LOCATE
SURVIVORS IN THE AFTERMATH
OF NATURAL DISASTERS. THE
INDIAN GOVERNMENT IS EVEN
USING THEM TO TRACK HERDS OF
ELEPHANTS AND WARN RAILWAY
OPERATORS WHEN THEY’RE
NEAR LINES. BUT THAT’S JUST
SCRATCHING THE SURFACE. THERE
ARE PLENTY MORE INNOVATIVE
APPLICATIONS, LIKE THESE…
VOLCANO DIVING
In early 2013, NASA
Earth scientists flew
Dragon Eye UAVs –
transferred from the
United States Marine
Corps and equipped
with thermal cameras
and sensors – into the
sulfur dioxide plume
of Turrialba Volcano,
near San José in
Costa Rica. The
project’s objective?
To improve the
remote-sensing
capability of satellites
and computer models
of volcanic activity.
CROWD CONTROL
Sky Sapience has
developed the
HoverMast – a tethered
hovering platform that
can be mounted on any
vehicle. At the click of a
button it autonomously
deploys, rising up to
50 metres in 15 seconds.
Capable of transferring
critical data in real time,
it is designed for rapid
mobile intelligence
gathering. The Israeli
Defence Force recently
took delivery of the
system for surveillance
and other missions.
REMOTE RESCUE
In an alleged first, the
Royal Canadian Mounted
Police in Saskatchewan
province last year used
the small Draganflyer
X4-ES helicopter UAV
to locate and treat an
injured man whose
car had flipped over
in a remote, wooded
area in near-freezing
temperatures. The drone
managed to pinpoint
the accident victim’s
position after a regular,
manned helicopter
equipped with night
vision had failed.
IMAGES: JESS CAMPE
the friendly, flexible
face of drones…
THE MARKET OPPORTUNITY
According to David Sales, Senior
Vice-President – Aviation, at
brokers Lockton, this tentative
approach is mirrored by clients in
the insurance market: “We’re being
asked to quote on quite a few risks,
but not many of those enquiries
are coming to fruition. They see
the prices, then it goes very quiet.”
Sales thinks the London aviation
market would look at UAVs, not just
from the UK, but around the world:
“The capacity is still tight, especially on
the hull side. On the liability side there
is more interest from underwriters.”
This reflects the level of risk in
terms of loss and damage to the
UAVs themselves, says Martin Cox,
Underwriting Executive at Global
Aerospace: “The hull losses have been
significant, partially because a lot of
the uses are very experimental. But
we haven’t seen any significant claims
for damage to third-party property
or injury to people.”
Global Aerospace insures UAVs
weighing up to 150kg outside the
UK. Above that weight, they are
subject to even greater restrictions and
controls – with hull values ranging from
US$250,000 to more than US$100m.
UAVs of this size and sophistication
tend to be used by public authorities,
especially the emergency services.
They have been deployed for the
purposes of border control, search
and rescue, and tracking suspects.
On average, they carry third-party
liability cover up to around US$10m,
says Cox, although this rises to
US$50m for some of the larger risks.
In some countries – France and
Germany for instance – public
services are indemnified for their
UAV use by national governments.
Kiln offers UAV and hull liability
insurance for all types of UAVs, but
sees the biggest growth coming from
the small-to-medium end of the
market – where hull values range
from €30,000 to €100,000 – due to
the regulation currently in place. Says
Jay Wigmore, Aviation Underwriter:
“It’s the sub-50kg market – sub-20kg
in the UK – which is seeing the most
growth. People are looking to
develop uses within the current
CAA regulations, where the vehicle
has to be kept within line of sight
of the ground-based operator.”
Wigmore says Kiln is working
closely with manufacturers to
understand the potential uses, and
that it has teamed up with Resource
UAS, one of two firms approved to
train operators of UAVs by the CAA.
The rates it offers on combined or
standalone hull and liability coverage
are based on whether operators are
holders of a CAA-approved
certificate from Resource UAS.
The CAA effectively licences the
operators of smaller UAVs and makes
them responsible for safety, rather
than concern itself directly with the
airworthiness of individual units.
Adrian Leatherland, Divisional
Director at Resource UAS, says that
one of the biggest challenges for
“Even a
lightweight UAV
is equivalent to
the weight of a
small vacuum
cleaner. Imagine
that falling on
someone’s head
from 400 feet”
GERRY CORBETT,
UAS PROGRAMME
LEAD, CAA
operators is to professionalise the
image of the market: “We’re keen to
ensure this whole business grows out
of its model aircraft hobbyist image
to become part of the professional
aviation market.” He says the people
currently coming forward for operator
training aren’t professional aviators,
but photographers, surveyors and
other professionals “who see an
opportunity to gather data in a
cheaper, faster and safer way”.
This approach sits well alongside
the CAA, explains Corbett: “The
regulations we have were developed
over one hundred years. We are not
going to radically change them or
our approach. UAVs are still aircraft
and are still piloted.” The CAA wants
to strike a balance between allowing
UAVs to develop, without taking risks
with safety: “Operators largely get
32 / UAVs
“We are already
seeing strong
growth, but we
expect the smaller
end of the market
to really open
up in the next
five years”
MARTIN COX,
UNDERWRITER,
GLOBAL AEROSPACE
what they ask for. The more freedom
they want, the more information
they have to give us. We ask: where
is the risk? It is a trade off between
risk and benefit,”says Corbett.
There are boundaries to what the
CAA will approve, however. It remains
reticent in granting permission for
any use near built-up areas unless it is
controlled by the emergency services.
“Even a very lightweight UAV of 5kg
to 7kg carrying a camera is equivalent
in weight to a small vacuum cleaner,”
says Corbett. “Imagine that, combined
with fast-moving rotor blades, falling
on someone’s head from 400ft.”
Death and injury is not uncommon
among model plane and helicopter
enthusiasts: a 19-year-old operator of
a model helicopter died in a Brooklyn
Park last September when his model
struck him. And in July, a Swiss man
was found dead near his model plane,
with severe cuts to his arms and legs.
As well as worrying the CAA, the
physical risks also concern many
insurers and risk managers, says
Mark Butterworth of Condie Risk
Management: “UAVs are clearly a good
use of technology, especially when they
are in remote areas, well out of the way
of people. But if you’re a major brand –
33
INTERNET OF THINGS
WORDS BY HELEN YATES
like Amazon – looking to break
new ground in their use, I would be
cautious. I would question the good
sense of such schemes unless the
publicity value is overwhelming.
There is a huge reputational risk here
if one of these goes wrong – especially
where people are killed or injured.”
These dangers are amplified
when you consider that the
commercial market for UAVs is
still in an incubatory phase. As with
any emerging technologies, there
will be questions around the reliability
of UAV systems – which will be
influenced by everything from the
integrity of the data links connecting
them to operators, to the efficacy of
in-built ‘sense and avoid’ protocols in
the event that operator control is lost.
In the future, the possibility of UAVs
being operated autonomously without
human intervention, together with
the potential for hacking or malicious
hijacking, could further compound the
threat of ground impacts or mid-air
collisions resulting in death, hull loss
or third-party property damage.
A REGULATORY ROADMAP
Much of the future development
in commercial use of UAVs lies
in the hands of aviation regulators
and they are working closely to
create a roadmap for harmonising
the rules, led by the EU and the
Joint Authority for Rule-Making
for Unmanned Systems.
The current roadmap is looking
at harmonisation for the under-20kg
UAVs flying in line of sight by 2018,
with certain ‘beyond line of sight’
operations allowed in sparsely
populated areas.This is already
permitted in the UK around Aberporth
Airport in Wales and over parts of
Salisbury Plain.This will be followed
between 2019 and 2023 with
agreement on rules allowing larger
UAVs to operate in some types of
airspace and limited beyond line of
sight operations in populated areas.
That is when we might see UAVs flying
down streets, checking on the elderly,
delivering medicines to pre-determined
collection points, monitoring traffic
or anti-social behaviour.
Beyond that, there are more ambitious
plans for unmanned cargo planes using
general airspace and airports, with the
rules allowing that to happen coming
in the latter part of the next decade.
The London market is braced for
the expansion in demand for insurance
this will bring, says Cox, of Global
Aerospace: “We are already seeing
strong growth, but we expect the
smaller end of the market to really
open up in the next five years.”
TO FIND OUT MORE, DOWNLOAD
LLOYD’S REPORT, AUTONOMOUS
VEHICLES: HANDING OVER
CONTROL – OPPORTUNITIES AND
RISKS FOR INSURANCE, AT
LLOYDS.COM/RISKINSIGHT
Smart devices, real time
data… meet the future
Soon, billions of objects will have their own IP address. And
this connected world could turn insurance models on their heads
The Internet of Things (IoT), uniquely identifiable objects
that have their own Internet Protocol (IP) address, will grow
to an installed base of 26 billion units by 2020 – a 30-fold
increase from the 0.9 billion in 2009, according to analysts at
Gartner. And while the obvious application for insurance is
in telematics – monitoring how cars are driven, with policies
determined by that data – there are many other uses.
Through a subsidiary, agribusiness giant Monsanto uses
internet-connected sensors to capture everything from
meteorological information and the size of crop yields to
the water-holding capacity of soil. It can then draw on this
big data to offer farmers targeted insurance policies – and
to determine whether they’re likely to have experienced a
loss and settle a claim. In fact,
the Kenyan microinsurance
scheme, Kilimo Salama, is turning
“ That’s the
your typical claims process on its
opportunity
head by embracing ‘connected’
for the IoT.
agriculture. Really, there is no
It allows us to
‘claims’ process. Automated,
IP-based weather sensors record if,
monitor data
for example, rainfall is 15% below
in real time,
the average, a payout is calculated,
such that we
and the amount owed to farmers is
can prepare
then sent to their mobile phones.
for a loss,
and in some
cases prevent
it as well”
CRAIG BEATTIE,
INSURANCE ANALYST,
CELENT
PREVENTION, NOT CURE
And with sensors becoming ever
cheaper and more sophisticated, the
ability to capture and use the data
derived from the IoT is getting easier
– making a shift from a reactive to a
proactive approach to claims
possible, particularly in personal
lines, where risk management is not as
prevalent as it is in commercial insurance.
“There is a Chinese saying that a very
good doctor is someone whose patients
never get sick in the first place,” says Craig
Beattie, an analyst in Celent’s insurance
practice. “That’s the opportunity for the
IoT. It allows us to monitor data in real
time, such that we can prepare for a loss
and in some cases prevent it as well.”
In January, Google revealed it was
testing a smart contact lens that can help
measure glucose levels in tears. Devices
that can read your vital signs and raise
a red flag early on offer compelling
opportunities for life insurers.
“There is a lot of speculation the future
will include sensors that will tell life
insurance companies how healthy people
are,” says Alex Plenty, Executive Partner
at IBM Global. “That could either be used
to change premiums, or life insurers will
become more benevolent in terms of
offering a lifestyle improvement product.”
Around the home and office,
meanwhile, there are plenty of ways the
IoT might help to avoid loss. In 2012,
Philips launched the Hue internet light
bulb. It follows that, if lights are being
switched on and off in a property that is
supposed to be vacant, suspicious activity
could be taking place. By linking this
information to a security fi rm, more
burglaries could be prevented.
Fred Cripe, PwC Senior Advisor and
former Senior VP at Allstate, offers a
further example: “An increasing number
of seasonal homes have temperature and
electrical power monitors. If the power
goes out or the temperature falls below a
certain level and your pipes are in danger
of freezing, it will trigger an alert and the
loss prevention folks can go out and do
what’s necessary to protect the home.”
As the insurance industry continues
to explore the opportunities the IoT
presents, the ability to own and exploit
big data will deliver a real competitive
advantage for pioneers in the space.
34 / HERITAGE
WORDS BY GLYN BROWN
35
The Great Exhibition of lyon
In 1913, a future prime minister of France pushed ahead with
plans for a grand exhibition that would put Lyon on the map,
and insured it with Lloyd’s against a budget deficit. Just in case…
The year was 1913, and Europe stood poised on the brink of
war. In the French city of Lyon, the ambitious and charismatic
young mayor, 32-year-old Edouard Herriot, was overseeing
enthusiastic preparation for the Exposition Internationale, or
Great Exhibition – to be held from May to November 1914.
Lyon had not had a happy exhibition record. Hasty
organisation, delays in construction and torrential rains made
its first venture, in 1872, a commercial failure. In 1894, a
shadow was cast over the second when, leaving a banquet held
in his honour, President Sadi Carnot was assassinated by Italian
anarchist Cesare Santo, leading to riots throughout the city.
Herriot, however, was filled with idealism and hope. His
plan for the 1914 exhibition was to demonstrate the modernity
of Lyon with a glittering new development where, over
75 hectares, the city promoted itself as a centre for excellence,
prosperity and urban ability. And, at first, it seemed Herriot
had broken his city’s exhibition curse. But as writer Henri
Beraud later recollected: “It is a fact that every 20 years in our
country, a World Expo is a signal of the most disastrous events.”
Perhaps with the bumpy past in mind, Herriot had already
taken the precaution of insuring the exhibition against a budget
deficit. Over the New Year holiday of
1913-1914, he had travelled to Lloyd’s
in London, where he was introduced to
legendary underwriter Cuthbert Heath.
Heath’s reaction seems to have been
amusement; every time anyone asked
him to insure an exhibition, he told
Herriot, they promised a brilliant
success and exceptional profits, but in
the event, he always had to face a deficit.
“However, that’s of no importance,” he
said. “Here’s a pencil and a slip of paper.
Write down the amount for which you
wish to be guaranteed. I will deduct the
premium, and the deal will be closed.”
Herriot asked for a guarantee of 3mFF,
and promised to pay a premium of
250,000FF. To his astonishment, “the
whole thing was drawn up in a single
sentence, and written with that lead
pencil”. Such informality was baffling.
Where, asked Herriot, would they find
a lawyer to ratify their agreement? Heath
laughed. “Will a lawyer be more honest
than we are? Put the paper in your
pocket… And sleep well.”
Despite his efforts, Herriot’s exhibition
opened late – and within weeks had
encountered every sort of hazard. “A
tempest soaked the buildings; a sudden
rising of the Rhône carried away the
bridge that lead to the fairgrounds;
strikes raged.” There was also the little
matter of war, declared on 3 August.
Herriot was in despair: “What was to
become of me? Full of anxiety, I wrote
in the autumn to the good Mr Heath.”
Heath replied at once, and a few days
later his loss adjuster, a Mr Price, arrived
in Lyon. He rapidly verified Herriot’s
accounts, “then, in the elegant flourish
with which one offers flowers to a lady, he
handed me the cheque which freed me”.
Next morning, Price left for London
– just before the city treasurer of Lyon
found that, in reckoning the exchange
rate, Price had miscalculated,
overpaying Herriot by 25,000FF.
Herriot cabled Heath, whose response
was typical: “Give the money to a French
war charity.” Said Herriot, “Now I knew
what an English signature meant.”
EVENTS
HOW TO PLACE BUSINESS
AT LLOYD’S WORKSHOP
26 MARCH, KRAKOW, POLAND
Lloyd’s Poland will host an event where
Lloyd’s brokers and underwriters can meet
Polish brokers – giving them the opportunity
to discuss practical and technical matters on
how to place Polish clients’ risks at Lloyd’s.
Contact: ewa.zylak@lloyds.com
GLOBAL CONTACTS
SPORTS AND FINANCE,
CLASS OF BUSINESS EVENT
AUSTRALIA
4 JUNE, FRANKFURT, GERMANY
RIMS ANNUAL CONFERENCE
Lloyd’s will host a full-day seminar
for brokers and underwriters from the
market and interested parties from Germany
and Austria working in professional and
amateur sports – including associations,
club managers and advisors.
Contact: events@lloyds.com
27-30 APRIL, DENVER, US
AIRMIC
RIMS represents more than 3,500 mostly
North American industrial and service
companies. The Lloyd’s market will be
well represented by a contingent of around
80 underwriters and brokers ready to meet
with delegates on the market’s exhibit.
Contact: events@lloyds.com
16-18 JUNE, BIRMINGHAM, UK
LLOYD’S AMERICA: MEET THE MARKET
1 MAY, BOSTON, USA
An opportunity for US brokers to spend a day
with Lloyd’s underwriters, London brokers
and Lloyd’s coverholders. There will be
opening remarks from Inga Beale, Lloyd’s
CEO, and Vincent Vandendael, Lloyd’s
Director of International Markets.
Contact: kiran.bhovan@lloyds.com
LLOYD’S IRELAND: MEET THE MARKET
1 MAY, DUBLIN, IRELAND
Lloyd’s Ireland will host the third biennial
Meet the Market Day in the Convention
Centre, Dublin. The Irish broking
community are invited to come and meet
with a range of Lloyd’s stakeholders from
the local and London market in the replica
Lloyd’s underwriting room.
Contact: sarah.hannon@lloyds.com
BIBA
14-16 MAY, MANCHESTER, UK
Keith Stern, Lloyd’s Regional Manager, UK
and Ireland – together with representatives
from the Lloyd’s market – will host stand
C70 at the 2014 BIBA Exhibition and
Conference at Manchester Central.
Contact: events@lloyds.com
Lloyd’s will host stand 67/68 at the 2014
Annual Airmic conference at the ICC in
Birmingham. Representatives will be
on hand to provide further information
on how to access the Lloyd’s market.
Contact: events@lloyds.com
LMA CLAIMS MATTERS FORUM
(CTP UPDATE)
Provides managing agents with an update
on the progress of the CTP project and
how this affects your work. LMA Claims
Matters Forum is run by the LMA.
For details on how to attend please email:
margaret.fawke@lmalloyds.com
OLD LIBRARY
OLD LIBRARY
OLD LIBRARY
OLD LIBRARY
OLD LIBRARY
9 MARCH, 9.00 AM
4 MAY, 9.00 AM
16 JULY, 9.00 AM
10 SEPTEMBER, 9.00 AM
12 NOVEMBER, 9.00 AM
MARKET PRESENTATIONS
BENELUX
4 MARCH, 9.30AM
CANADA
23 APRIL, 9.30AM
POLAND
24 APRIL, 9.30AM
NORDIC
22 MAY, 9.30AM
PR1 and PR2, Lloyd’s, London
Old Library, Lloyd’s, London
PR 1 and 2, Lloyd’s, London
Old Library, Lloyd’s, London
US
Old Library, Lloyd’s, London
ITALY
PR1 and 2, Lloyd’s, London
Adrian Humphreys
General Representative, Australia
+61 (0)2 9223 1433
adrian.humphreys@lloyds.com
BRAZIL
Marco Castro
Managing Director & General
Representative, Brazil
+ 55 (21) 3266 1900
marco.castro@lloyds.com
CANADA
Sean Murphy
President & Attorney in Fact, Canada
+1 416 360 1512
sean.murphy@lloyds.com
CHINA
Eric Gao
General Representative, China
+86 21 6162 8200
eric.gao@lloyds.com
HONG KONG
Kim Swan
General Representative, Hong Kong
+852 2918 9911
kim.swan@lloyds.com
JAPAN
Iain Ferguson
Representative & Chief Operating Officer, Japan
+81 (0)3 5656 6926
iain.ferguson@lloyds.com
MEXICO
Gabriel Anguiano
Manager, Mexico
+44 (0)207 327 6137
gabriel.anguiano@lloyds.com
EUROPE
Benno Reischel
Head of Europe
+44 (0)207 327 5327
benno.reischel@lloyds.com
SINGAPORE
Kent Chaplin
Head of Asia Pacific, Lloyd’s Asia
+65 64999 330
kent.chaplin@lloyds.com
UK, IRELAND, MIDDLE EAST, AFRICA
26 JUNE, 9.30AM
3 JULY, 9.30AM
Cameron Murray
Head of UK, Ireland, Middle East and Africa
+44 (0)207 327 6854
cameron.murray@lloyds.com
USA
Hank Watkins
President of Lloyd’s America
+1 212 382 4060
hank.watkins@lloyds.com
WWW.LLOYDS.COM/LLOYDS/OFFICES
Lloyd’s One Lime Street, London EC3M 7HA
Telephone +44 (0)20 7327 1000 Fax +44 (0)20 7626 2389
www.lloyds.com