Lloyd’s to expand in Malaysia

Lloyd’s of London will be expanding its insurance and reinsurance operations in Malaysia in the first quarter of next year, said chairman John Nelson.

Through an onshore Tier 1 licence, the specialist insurance and reinsurance player wants to take advantage of Malaysia’s raised risk profile and the low insurance penetration rate of 1.8 percent.

“We believe if Lloyd’s comes in on a reinsurance basis, we are providing the backdrop for the Malaysian insurance industry to increase the penetration rate, complementing and filling the gap on the risks they can write,” he said at a media briefing held recently.

Lloyd’s currently serves the Malaysian market as a Tier 2 reinsurer through its Labuan service companies and as a cross-border reinsurer from London and Singapore. It is in “advanced” stage of discussions with Bank Negara Malaysia and will announce the outcome within two months. “Operations are likely to begin in Kuala Lumpur in the first quarter of next year with two to three managing agents,” said Nelson.

He pointed out that the Malaysian economy’s “extraordinary” growth track over the past decade proved that it was robust, diversified and had a high degree of industrialisation and commercialisation, backed by a large pool of talented people. “Malaysia is increasing the volume of risks as business and commercial communities grow.”