Lloyds Chief Says Planning Asia Push

The chairman of Lloyds of London yesterday said it plans a push into other parts of Asia after opening an office in Japan.

In an interview with Reuters Financial Television, Sir David Rowland said Lloyds plans to expand into Singapore, where he said executives were holding active discussions on such a move, as well as other places. It has already opened a small office in Hong Kong.

Naturally I want to see that the outreach of Lloyds to the developments in the Asia-Pacific area is increased all the time, he said.

Rowland, who formally opened Lloyds new Tokyo office on Tuesday, said the new operations in Japan would not pose a threat to domestic insurers, at least initially, as his organisation plans to concentrate on new products which should expand the entire marketplace.

Of course we shall be competing, but well be competing in such a way as to extend the scope of the market, rather than come in here just to steal other peoples clothes, he said.

He added that the liberalisation of Japans insurance industry, which now allows brokers to operate for the first time, will put pressure on insurers, including Lloyds, to tailor products to clients needs, which in turn will create fresh demand. He said the size of Lloyds Japanese presence, with 12 employees in Tokyo, will limit its ability to threaten domestic insurers.

But efficiency of the operation cannot be measured simply by size because a relatively small number of experts can channel business back to the head office, he said, adding that the number of workers in Tokyo will match Lloyds biggest overseas operation, in Italy. Currently, 38 of Lloyds 163 syndicates are committed to underwriting Japanese business.

Rowland declined to give revenue targets for the office.

We will not remotely be of a scale to make a big impact, in the initial years, against the size and ability and strength of some of the people that weve done so much reinsurance with, he said.

Lloyds has been providing reinsurance services for many of Japans non-life insurance companies for over 100 years.

Rowland said Lloyds plans to compete in the areas for which it is traditionally known insurance against natural disasters and insurance for major infrastructure operations, such as nuclear power.

He also said Lloyds will boost its scope in Latin America as well but does not plan offices in the region yet.

In not building palaces across the world, our expenses are sometimes rather less than our competitors, he said.

Rowland also said Lloyds recent financial difficulties have not hindered expansion efforts. The company emerged from a large-scale restructuring in September 1996.