A global revolution is taking place in the insurance industry – especially when it comes to Asia – and the industry should embrace the challenges to get ahead, says Lloyd’s Director Worldwide Markets Julian James.

He told brokers at the recent 24^th annual National Insurance Brokers Association Convention the industry is up against the greatest challenges it has ever faced, but growth across Asia and other opportunities are there for brokers and insurers.

Mr James says the global economy’s “centre of gravity” is moving eastward, wealth patterns will shift dramatically and so will insurance demand.

China is in Lloyd’s sights as a region of growth and opportunity, and the fact that the country will become the world’s most powerful economy within 30 years makes it attractive to the market.

“Lloyd’s is in no doubt that this is the right time to further expand the geographical diversity and risk profile of the market,” he said. “We are, therefore, about to launch a new reinsurance platform in China. We are on track to submit our operational plan and hope to be writing business by the first quarter of next year.”

Mr James says local brokers should also view the expansion in China as a long-term opportunity. Brokers have a big job to do in converting awareness of their services into sales.

“So far, foreign entrants have only managed to amass a 1% share of the primary market,” he said. “But we foresee the broker’s position strengthening in the medium term as the economy grows and risks become increasingly complex.” 

In the past, Asian insurance buyers have preferred getting their cover directly from insurers but Lloyd’s research shows there is now a demand for brokers.

“Those of you in Australia may be well placed to provide it – and not just in the longer term,” Mr James said. “One-third of insurance companies seeking reinsurance and a fifth of insurance buyers in Asia told us that they expect to increase their use of brokers by the end of 2007.”

Niche areas with specific opportunities for brokers are marine cargo, product liability, directors’ and officers’ liability, and professional indemnity. According to Mr James, these classes are expected to see increases in demand of about 25% in the next 18 months. 

“Some of these liability classes are particularly well understood here in Australia. And taken all together, I believe that you have the opportunity to leverage your expertise and apply it to the new risks and next generation of buyers from all around Asia.”