Chapter 1 - B

Question 1

What is a multinational company?

Answer 1

• Operates is a number of different countries but may still have a home base.
• Have the ability to respond to local demands as the business is a series of semi-independent operations all working under a global brand.
• An example would be Prudential plc.

Question 2

What is a global company?

Answer 2

• sees the whole world as one potential market.
• the aim is to be regarded as a global, singular brand.
• An example is Lloyd’s.

Question 3

Which area are classed as having advanced economies?

Answer 3

• USA
• Japan
• Europe

Question 4

BRICS are all major developing or newly industrialised countries, which countries are included in BRICS?

Answer 4

• Brazil
• Russia
• India
• China
• South Africa

Question 5

BRICS developing countries are a major target for multinational and global insurers. Why?

Answer 5

The countries are characterised by large populations with low average income. This has resulted in limited economic awareness and low insurance penetration in these areas. With the development and fast-growing economies the insurance market is rapidly growing.

Question 6

The London Market has a general agreement that the core of its business is?

Answer 6

Internationally traded insurance and reinsurance business.

Question 7

There are 7 main participants in the London Market. Name them:

Answer 7

• Insurance companies who are members of the International Underwriters Association (IUA).
• Other insurance companies with London underwriting offices.
• Contact offices of foreign companies not authorised to transact business in the UK.
• P&I clubs, Marine associations insure liabilities for cargo, crew, passengers and third parties.
• Pools, there are two in the London Market. International Oil insurers and the British Insurance (Atomic Energy) Committee.
• Lloyd’s of London.
• Insurance brokers.

Question 8

The Legislative Reform (Lloyd’s) Order 2008 removed what restriction?

Answer 8

Only Lloyd’s-authorised brokers could place business with Lloyd’s syndicates.

Question 9

How much does the London Market account for of the total non-life and reinsurance business written in Great Britain by the UK insurance industry?

Answer 9

1/3.

Question 10

What was created to ensure that the London Market maintains its position in the international insurance market?

Answer 10

London Market Group (LMG).

Question 11

Who do the London Market Group (LMG) represent?

Answer 11

The organisations who make up the London Market.

Question 12

What fa tors have allowed London to develop into a successful international centre for insurance and reinsurance? (List all 10)

Answer 12

• Political and economical stability.
• Geographical location.
• Quality transport system.
• Highly qualified personnel.
• Office space at competitive prices.
• English is the business language.
• Stable legal and regulatory environment.
• Time zone.
• Foreign presence.
• Developed financial centre.