New reinsurance managing director Sung tells GR of broker’s intention to include fine art in regional strategy
Following his appointment as managing director, reinsurance, at Arthur J Gallagher (Singapore), Maxwell Sung told GR that the broker was “opening its doors to a variety of classes of business”.
As part of AJG’s strategy to increase its Asia Pacific portfolio, the company’s reinsurance division has been expanding across several core specialty lines, including trade credit and political risk cover, marine cargo and hull.
However, Sung said fine art risk was an area of reinsurance that presented new opportunities for AJG in the short to medium term.
Fine art lines
“That includes museums, private collections and exhibitions, and is quite a new product in Asia,” he said. “Most local insurance companies don’t have treaty protection for that class of business.”
Sung added that there was growing demand for facultative reinsurance for fine art in Asia.
“More and more exhibitions are being held in Hong Kong, Singapore, Shanghai, China and Seoul, so there is opportunity in this,” he said.
“We’ve found Lloyd’s and other big insurers with great capacity in this area, and we have been working with a variety of exhibitors and insurers trying to promote this class of business.
“Anyone can come in and cut through on the prices, but we much prefer to come into the market with at least one new product. We tell clients we have facilities in London that we can use to underwrite the bigger risks. We can insure up to $100m easily, and that’s what we’re aiming to target.”
Sung, who has lived in Taiwan, the US and the UK, said that prior to his relocation to Singapore two years ago, AJG already had a portfolio in the Asia Pacific.
“These portfolios were mainly in the property class of business, which includes property reinsurance, energy reinsurance and construction reinsurance,” he said.
We have marine cargo reinsurance and terrorism reinsurance. We believe these are the areas where we’re going to see strong growth’
“On top of that, we have marine cargo reinsurance and terrorism reinsurance. We believe these are the areas where we’re going to see strong growth. At the same time, we believe our core business, which is the property class of business, will continue to grow.”
Sung said that if his strategic business plan was met, AJG Singapore’s reinsurance-related income could see annual growth of 30%, over next three years.
The company’s reinsurance book mainly stems from China and South Korea, but Sung said he was looking at opportunities in Malaysia, the Philippines and Thailand.
“Thailand has become an interesting energy market for us on the reinsurance side,” he said. “We have also expanded our capacity to extend coverage beyond north and south Asia to cover Australia and New Zealand – in fact the entire Asia Pacific.”
Japan is another market of interest, according to Sung.
“Japan is a tough market to crack, but you’ve got to start somewhere,” he said. “If you look at the Japanese insurance industry, the five major carriers there probably have market share of around 90%, whereas all the international carriers only have 10% of insurance premiums.
Japanese companies much prefer to trade with a domestic company than a foreign carrier. Nevertheless, that doesn’t mean we don’t stand a chance’
“Japanese companies much prefer to trade with a domestic company than a foreign carrier. Nevertheless, that doesn’t mean we don’t stand a chance.”
These expansion plans have prompted Sung to seek to hire teams of specialist brokers. “Over the past two years, finding good people has been the most challenging part of my job,” he said.
“But we’re not afraid to go out and hire good people, because you’ve got to find the people who have recognition from the industry and clients.”