Leading specialist credit and political risk insurance (CPRI) broker BPL Global unlocks Lloyd’s market capacity for credit risk cover for Japanese operations.
BPL Global has led the way by establishing a binding authority with Lloyd’s Japan Inc. (LJI) dedicated solely to covering credit risks from Japan, using capacity from global insurer MS Amlin as the lead syndicate on the binder which any Lloyd’s syndicate is also able to join. Under this arrangement, BPL Global is now able to facilitate credit insurance cover with Lloyd’s for the Japanese subsidiary companies of its global clients from London via LJI. As a wholly-owned subsidiary of Lloyd’s, LJI acts as a local coverholder for managing agents in London and is able to issue local policies to Japanese insureds on behalf of Lloyd’s syndicates.
The development comes in response to an uptick in demand from clients for a seamless global insurance solution that can cover their Japanese subsidiaries with Lloyd’s-rated security on a direct basis.
A major European bank with shipping operations in Japan has now become the very first BPL Global client to benefit from a policy issued under the binding authority, receiving credit insurance cover for a seven-year policy term. Importantly, the policy wording follows the client’s usual template and is subject to English law in line with all their other insurance business placed through BPL Global. BPL Global did not have any direct contact with the Japanese insured or conduct any activities in Japan as the policy condition was procured by the bank’s European headquarters.
Ordinarily, Japanese insurance regulation requires a local policy to be issued for all direct insurance. Lloyd’s is unique amongst London market insurers in being able to issue local policies for Japanese insureds via LJI, which is licensed as a General Agent in Japan and acts under binding authorities established with Lloyd’s syndicates. This arrangement gives Japanese insureds immediate access to Lloyd’s security and removes the need for a fronting arrangement to be established by an insurer locally licensed in Japan in order to access London market capacity, which can bring additional complexity and cost.
The binding authority established with LJI and led by MS Amlin can cover cross-border credit insurance transactions within the Credit (CR) and Contract Frustration (CF) risk codes. The binding authority’s terms and conditions can be freely amended to cater for the coverage needs of other Japanese insureds, and any Lloyd’s syndicate can be added to the binder via endorsement.
“We are delighted to secure this market leading opportunity and cater to the rising demand among our clients for seamless, straightforward insurance cover across their global operations – irrespective of territory,” said Sian Aspinall, Managing Director at BPL Global. “Lloyd’s is uniquely placed in being able to underwrite Japanese business from London via LJI, and so this is a huge step forward in terms of unlocking Lloyd’s market capacity for insureds operating in the country.”
Mineyuki Yokota, Underwriting Service Director at LJI, added, “This solution opens up new routes for Lloyd’s underwriters to provide credit insurance in Japan and provides myriad benefits for internationally operating companies. We hope that this latest credit insurance policy will be the first of many so we can continue to build capacity for Japanese risks.”
Jack Keatings, Underwriter at MS Amlin, said, “As a binding authority specifically set up for credit insurance, this represents a significant step forward for the CPRI market, and for client servicing more generally. Increased competition promotes healthy market dynamics – something that should be welcome by both insureds and insurers alike.”