Lloyd’s can evolve to suit reinsurance market dynamics: Nelson

Chairman of the Lloyd’s insurance and reinsurance market John Nelson said that Lloyd’s can evolve to suit new reinsurance market dynamics caused by the entry of new capital in an interview with CNBC at the World Economic Forum meeting in Davos.

As we wrote last week, John Nelson said in a recent interview that new capital, largely referred to as third-party or alternative reinsurance capital which comes from institutional investors such as pension funds and dedicated specialist managers, is changing the dynamics of how reinsurance is distributed and presents a challenge to Lloyd’s.

Yesterday, Nelson got a chance to follow-up on that comment and said that Lloyd’s stands in the fortunate position of being able to evolve the way it accepts and utilises capital to suit the changing market dynamic. This is of course absolutely true and exactly why Artemis’ article of last week was written.

Lloyd’s does indeed stand uniquely placed, with a deep pool of underwriting talent and a structure which allows, and should encourage, capital in all its forms into the market. Of course this is particularly true and necessary where that capital has a lower cost associated with it which could benefit Lloyd’s and make it even more competitive across the global insurance and reinsurance sectors.

In his interview yesterday, Nelson said; “Lloyd’s as a market, we are the only insurance market in the world, we are the leading specialist insurer in the world. We have the luxury that as a market we can frame the way in which we attract capital, the way in which we do business, to suit the new dynamics. So we are in a relatively strong position, providing we keep evolving our own business model.”

It’s encouraging to hear Nelson speaking in this way and his thought that the market needs to continually evolve is precisely the premise behind Artemis’ article from last week.

You can watch the segment from the CNBC interview below (compatible devices only).