NICK CHARTERIS-BLACK: It’s fascinating to observe how those domiciles have been competing. Bahrain was historically the original centre for financial services, and then there was all the noise about Dubai and Qatar. It will be quite interesting to see whether one will end up being dominant.
MATTHEW CHANDLER: One of the factors that is going to lead people to make decisions is the proximity of brokers. If you’re a broker market, you’re probably going to be attracted to where the business is, but it’s a regional interest, so wherever you go, you’re going to have an interest in all of the countries.
HELEN YATES: Could we see Lloyd’s setting up a platform in the Middle East in the same way as it did in Singapore?
MATTHEW CHANDLER: Well, in 2008, we did look at the Middle East. We asked managing agents where their interest was, and we were considering opening a promotional office in the region in 2008. But because of the global economic crisis, we decided to hold fire and let things settle down a bit. So we’ve still got a watching brief on the Middle East as a region, but we’ve been guided by the managing agents and whether they felt that was something beneficial to their business.
TIM GRIFFIN: All the business tends to be placed electronically, so I would question whether you need an actual centre for people to be in the same place.
STEPHEN MAY: At the moment, we just trade so differently from how we did years ago that it’s not necessarily where people are, but it’s where the circumstances are most attractive. If you think about how, in 20 years, Bermuda has gone from where it was to where it is now. There are a whole load of places that could have ended up doing what Bermuda did, but that was the one that caught fire first. And in the Middle East, the reason why Dubai gets a lot of coverage is because it got its air links sorted out very quickly and it is very much a focal point for transport. Also, it has built an infrastructure that is attractive to expats. Whether they’re coming from the West or the East, most people, when they’re looking at the Middle East right now, find it easy to move their families to Dubai initially.
Whether or not you should have a presence on the ground depends on
what you want to do. If you’re working with the locals in a supporting role, you’re probably better not being there because they feel like you’re invading their space. But if you want to broke your business locally, then you’ve got to be there.
MATTHEW CHANDLER: If Lloyd’s were to open an office, there’s no certainty that there would be a co-location of underwriters on the ground. It could be that there’s a promotional office because it’s important that people understand exactly what Lloyd’s is and how to access it. It’s about making sure that Lloyd’s is promoted effectively and well in the region.
CHRISTOPHER PLEASANT: Which domicile had Lloyd’s decided on?
MATTHEW CHANDLER: Lloyd’s asked its managing agents where they wanted to do things, and Dubai, Qatar and Bahrain all featured. Again, we made our decision that we just needed to take stock and see what happens once the global financial conditions settle down. We’ll ask the managing agents again, perhaps a little bit later in 2010, whether there is something Lloyd’s should be doing to support them in the region.
CHRISTOPHER PLEASANT: You can show commitment by moving into the region, but it is still very parochial. If you move into Dubai, you upset the people in Qatar because you didn’t choose Qatar.
STEPHEN MAY: Even being in Dubai, you irritate people in Abu Dhabi if you give them a Dubai card. And I’m not trying to be in any way patronising—I can quite understand it—but you have to be conscious of it and you can’t pretend it’s not the case as they’re very proud of their locality.
CHRISTOPHER PLEASANT: It’s interesting that the big European reinsurers have decided not to locate out there generally. The guys doing the Middle East are still handling it by travelling, and it’s almost better to be outside the region, or if you’re one of the big brokers—Marsh, Guy Carpenter and Willis—you have to be everywhere.
NICK CHARTERIS-BLACK: For international reinsurers, the trading relationships go back an awfully long time—that’s why the Europeans are so strong in the region. They’ve been dealing with the same people for 10 years and with the same company for 30 years.
Middle East Report 2010 | INTELLIGENT INSURER | 13
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