Industry leaders worrying about the HIH collapse harming Australia’s international reputation should relax. The collapse isn’t unprecedented in the global market, and there will be continued insurance failures around the world, according to Julian James, Lloyd’s Director of Worldwide Markets.

In an exclusive interview in Sydney last week during a brief visit to Australia, Mr James said the HIH collapse has contributed to the London market’s growing presence in Australia. Last year Lloyd’s underwriters wrote approximately $400 million in Australian business.

While he describes the Australian insurance market as very sophisticated and competitive, Mr James predicted that the number of Australian-based reinsurers will not grow.  “The importance of a physical underwriting presence in one location is less important. Why would a reinsurance carrier want to duplicate its physical location and its expense?” he said.

A comprehensive interview with Mr James, in which he reviews global developments and local markets and defends the reputation of Lloyd’s, will appear in the June edition of Insurance & Risk Professional.