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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/MARKETPRESENTATIONS8/7/2019 Aviation Canada - Insurance Penetration
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Lloyds
Con
ten
t 1Market Overview
Lloyds Canadian
business2
Lloyds Canada 3
conclusions 4
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Lloyds
Market
Overview
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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
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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
*
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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
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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
Source: Market Intelligence calculations based on P&C Canada 2009 Market Share Report - MSA Research Inc. www.msaresearch.com
1
CHUBB
NORTHBRIDGE
ECONOMICAL
RSA
AXA
AIG
COOPERATORS
AVIVA
LLOYD'S
INTACT
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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
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Lloyds
Lloyds
Canadian business
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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
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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
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Lloyds
Lloydshasunequalledmarketpositioninthelargestcommercialclasses
Underwritingcontinued
to
perform
well
in
2008
Majorlinesofbusinessbreakdown2008*(inGBPm)
Lloyds >Linesofbusiness
Source: Market Intelligence calculations based on P&C Canada 2009 Market Share Report - MSA Research Inc. www.msaresearch.com
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
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Lloyds
WhilstOntarioisstillthelargestrevenueproducerforLloyds,Lloydsisoverweight inWestern
Canadain
direct
business
Lloyds >Regionalposition
LLOYDSSIZE08 GBP174m
RANKING*
*ExcludingMOTOR&RI
CommercialProp
Liability
PersonalProp
LloydsCanada
1
GBP64m
GBP59m
GBP28m
LLOYDSSIZE08 GBP130m
RANKING*
Liability
CommercialProp
Aviation
7
GBP55m
GBP40m
GBP12m
LLOYDSSIZE08 GBP246m
RANKING*
Liability
CommercialProp
Aviation
4
GBP122m
GBP48m
GBP10m
LLOYDSSIZE08 GBP144m
RANKING*
CommercialProp
Liability
Aviation
1
GBP66m
GBP58m
GBP10m
AlbertaOntario
Quebec
BC
Source: Market Intelligence calculations based on P&C Canada 2009 Market Share Report - MSA Research Inc. www.msaresearch.com
2
Reinsurance GBP6m Reinsurance GBP18m
Reinsurance GBP61mReinsurance GBP5m
2
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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
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Lloyds
Thetop10ManagingAgentsaccountfor63% oftotalCanadianpremiums
Portfoliosshow
variation
and
the
largest
writers
write
substantial
binding
authority
books
Typeofbusinesswritten(inGBPm)
Source: Market Intelligence calculation based on Xchanging figures
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
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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
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Lloyds
Top10LloydsBrokersaccountfor70% ofpremiums
Mixof
larger
risk
management brokers
and
London
market
binding
authority
specialists
Source: Market Intelligence calculation based on Xchanging figures
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%
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Lloyds
Lloyds
Canada
Lloyds Canada R l i & C li
3
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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
InsuringinCanadaarisk
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)
InsuringinCanadaarisk
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
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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:deborah.moor@lloyds.com
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:mary.arabian@lloyds.com
3
Lloyds Canada > N t t 2010 3
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Lloyds
Lloyds Canada >Nextsteps2010 3
Wearearesourceforthemarket
LloydsCanadawillcontinuetoworktoexpandLloyds(andLCs)profileinCanada
Torontoofficeopening
Coverholdergroupgatherings
Individualcoverholder&OMCmeetings
Industryassociationparticipation
Participationinnetworkingevents&conferences
Continuetobuildourknowledgeofthemarketplaceandyourplansforbusiness
development
TakedirectionastohowwecansupportyourambitionsfortheCanadianmarket
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Lloyds
conclusions
Canada > Conclusions 4
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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
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Lloyds
Canada >Conclusions 4
MarketConditions:ratescontinuetostagnate,butCanadianmarkethasa
favourableliabilityclimateandrelativelysmallcatastropheexposure
Lloydsisgettingsomeopportunitiesasmanydomesticsarecapacityconstrainedfollowing
Ontarioautolosses
Lloydslicensedpositionhasbeenpreservedwithkeypartnershiprole with
Canadianbrokers
reinforced
LloydssuccessinCanadaprovideschallengeforfuture wheredowego
fromhere?
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Lloyds
Lloyds Canada > 2010 Events & Activities
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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
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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 53% 41% 53% 42%Ranking 1 7 3 1
DWPGBPM 59 122 55 58Marketshare 16% 11% 14% 15%
Lossratio 59% 59% 51% 70%Ranking 1 1 1 1
DWPGBPM 10 8 4 2Marketshare 20% 17% 14% 28%
Lossratio 37% 21% 43% N.A.Ranking 1 2 3 1
DWPGBPM 12 10 12 10Marketshare 39% 27% 31% 43%
Lossratio 106% 24% 93% 53%Ranking 1 1 1 1
Others DWPUSDM 5 1 2 120.51FOREXRATE08GBPtoCAD
Liability
Marine
Aircraft
PersonalProperty
CommercialProperty
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