Trent Williams: Right. Looking forward to talking about the Asia region. So, you've obviously spent a lot of time in a leadership role within the Pacific region and being quite new to the Asia region. Be really good to get your fresh perspective to join. Joining a fantastic team in Asia. You might say Asia's best construction team. And I guess coming into it, it'd be great to sort of get your early sort of general view as to how the market's looking in the early part of this year and into the into the final quarter and then next year. What's your sort of general view on it coming into a new region?
Mark Thompson: Yeah, it's been interesting coming into the new region and, and the, the trends that we're seeing here, from the market are very similar to what we've been experiencing, in that, Pacific region increased competition for risks, there in the markets that have left off, that are coming back in increased capacity. You know, all that and reductions in the pricing so that there's a lot of those same trends that we've been experiencing in Pacific and probably elsewhere in the world, within the region.
Trent Williams: The diversity is the one thing that sticks out for me. I'm interested in your, views across. You've obviously got so was it 13 countries within region and you've got different languages and different government regimes that are supporting some of those major projects that are that are getting placed. Have you found the differences in and the varied countries that you've got within your remit There?
Mark Thompson: Yeah, it is, it's interesting. with a number of the, the countries are obviously, different legislation around insurance. So, you know, having a lot of seasoned business behind local insurers, as opposed to, to direct, placements. But the trend we're seeing is, is still the same, you know, it's, whether it's a local lead, and a reinsurer back to, to the international market. We are seeing, you know, the international market in that, in that's in that position. So that situation's sort of taking, taking a, you know, a lead position from, from terms and conditions and driving, you know, the pricing and the placements for those projects. And also, the risk engineering as well. So, the risk engineering that, that, that comes with that and is now, you know, becoming more ingrained and a larger part of, know, the insurance for, for large scale projects and as a, as a matter of course.
Trent Williams: Yeah. Well, let's drill down into the, the major, products that that sit within construction in Asia. So, contract is all risk is, is, is really the driver. It's one of the main premium flows. It's where the majority of risk, when you're sitting down with, with project sponsors and contractors for the first time, it's, it's, guessing where you're starting. I mean, how are you finding the car market?
Mark Thompson: Yeah, the car market. It's quite buoyant. I describe it at the moment. There's a that there is a lot going on. As a as I mentioned earlier, there's a lot of competition, for, for good risks and risks across the region. There seems to be a lot more focus on growth from, from insurers, you know, which is also driving competition. And that's a competition in rates. So, you know, rates are reducing, and generally coming down, a lot of it is project driven rather than an annual flow to program. But, you know, benchmarking rates that we've seen today against, similar projects that we were looking at, you know, 12, 18 months ago, we were looking at probably ten, 20% off in terms of premium rating terms and conditions have definitely, you know, plateaued and are aligning, across projects. So what we are seeing is, you know, those differences in or potentially, you know, those differences where you had different insurers on different terms is all, those situations are just, just no longer there. And we are finding out on recent placements, even with a competitive pricing that, you know, we again oversubscribed, on projects and projects are not necessarily deemed to be overly vanilla as well. So there's definite appetite, across the region for, you know, for, for, for large scale construction projects.
Trent Williams: You hit on an interesting point there around the, the nature of the Asian businesses project by project. Not a lot of annual business, in fact, barely any, any annual business. So it's hard to compare annual programs year to year. But sort of going back and looking at projects of similar size and scope and scale from 12 to 18 months earlier, that you're saying that sort of like you said, ten, 15, 20% reductions fromwhere they were just 12, eight months ago. Great for clients. I guess you've got all the international players based in Asia. And like you mentioned, there's a real thirst for risk at the moment. So, advice for buyers, advice for clients as they sort of go through a process like that is it is it a matter of looking at, at partnership markets and some of the, the more strategic sort of thinking that goes into placement?
Mark Thompson : I think that definitely will be, and definitely is mean, price is always key, but, what we have found or I that I've seen, in my limited time here is, is there, where in a lot of the, a lot of tender situations, there are markets that will shy away from offering lead terms because they want to wait to see who a leader is, and won't necessarily commit to a broker. And I think as, the market matures and, partnering with brokers and markets will become a little bit more key, you know, for, for that long term stability and long term stability of pricing, there are very few annual, you know, floater style programs in the market in Asia. And, and the 1 or 2 that are very well contested, with a lot of appetite. You know, for them, I mean, from an insurance perspective, one thing they like to see is, is, is regular income, an annual renewable income, rather than, having to start afresh from the budget. You know, as a 1st of January every year, and in this competitive market, it's getting tougher and harder for to have that, ongoing regular income. So, you know, if there are clients, you know, willing to, to partner with, with brokers and insurers, for, for a medium term across, you know, floater style policies, I think there's, probably the ability to, to achieve, in some ways, you know, more pricing stability, but also, probably more competitive pricing because insurers will be willing, to partner for, for a longer time, for a longer period and bringing things like long term agreements, Ltas and, the competition is there for, for those types of programs.
Trent Williams: Some great points there. Just on the you talk. Right? You talk, sort of market conditions. What about some of the coverage enhancements? So, I guess the you go through a hard market and right gets affected, retentions get affected. But some of the cover that was there has been stripped back in recent years as well. Are you starting to see certain terms and conditions. Certain enhancements come back into programs. Is that how carriers are looking to differentiate?
Mark Thompson: Yeah, I think probably less so. I think some of the, very soft market terms, such as, guaranteed maintenance are no longer no longer there. But, you know, we are starting to see a broader application and the ability to obtain, like three, on certain types of projects. I think from a terms and conditions perspective, I think the market has seriously settled down. And it's, you know, what's fair and reasonable from a risk transfer from both sides, from the client and from the insurers. I think where we are seeing, you know, additional changes, not just in rate, but is in is in excesses and deductibles, I think, you know, insurers, in certain, you know, for certain projects are willing to, to take on a bit more, a bit more risk and lower those deductibles. But I wouldn't say we're seeing wholesale changes to, you know, policy terms and conditions.
Trent Williams: Okay. Good, good. Good to hear the stability around the design exclusion and level of maintenance cover that said, that's interesting. I might pivot there and look at construction liability if that's okay. Third party liability. Hey, you are saying that that market in Asia.
Mark Thompson: It's going through the same the same phase. I mean, as we know, in Asia, a lot of the major projects have the liability tacked on, as part of the, the CIA, you know, placement, but, we are still seeing, you know, there's a lot of capacity, a lot of interest, a lot of competition. So where we are looking at, you know, standalone, TPL or where we're looking to buy excess TPL over and above. What's available under the CIA, policy. We are seeing that there's a fair bit of, competition there. In even in, you know, in areas such as, you know, Hong Kong, where we have the, the employers like, the, the, the employers, compensation.
Yeah. Workman's compensation, which is traditionally a relatively tough market. We are starting to see new players come in, and that still sort of sits on the that casualty piece as well. So there are new markets and new entrants. In, in that space.
Trent Willams: So again, again quite difficult to do project by project. And, and looking at whether the right sort of built into to a broader program. But what are you saying sort of writing environment wise. What sort of if you compared it to 12 or 18 months ago, where's the rate on liability at the moment?
Mark Thompson: I'd probably say the same. We're looking at, you know, a 10 to 10 to 20%, reduction, is, is pretty much in line with what we've seen over the car side of the business.
Trent Williams: So again, crystal ball time as you look into Q4 and early next year, do you feel that Asia is sort of hit? It's trough as far as where the market was, was, was going to through this cycle. What sort of advice or guidance would you give, for projects coming up sort of like this year into next year?
Mark Thompson: I think there's still, potentially a little bit more movement. I think as we go into next year, a lot of the pipeline, of projects. A it seems to be a little bit lighter on the ball. What we're saying, you know, from clients, I think there's, a little bit more, probably a reduction in projects potentially coming to market. You know, particularly some of those more, you know, mature locations such as Hong Kong and Singapore. So insurers are acutely aware of that. So, are looking to, you know, compete on a, on a slightly smaller pot, so to speak. So, I think that there are opportunities there with good quality projects coming to market to, to see, to get a lot of competition for those. What we are seeing is a lot of, you know, energy transition, projects, moving away from the old coal fired power, we've seen a lot of gas and hydrogen combined, you know, power projects in that move towards renewables, hydro projects in the region. So there is a there is a pipeline there of strong sort of power projects. But that's not insurers, traditional not all insurers, traditional, appetite. So, where we are seeing, you know, that, that that sort of traditional infrastructure dry up a little bit, then insurers are having to pivot and, and either broaden appetites or compete on some of these projects that, you know, traditionally, you know, even two years ago, we probably had less, less potential leads.
Trent Williams: Final, final question just on, I guess, clients that we're working with a new clients for that matter, as well, how do we best differentiate the risk that we're taking to market? How do we make, the Willis risks that we take stand out from the rest when insurers sit down and will look through what's coming in?
Mark Thompson: I think it's, you know, it's having good quality information. if you've heard me before, it's always a key thing, you know, good quality information, clear and concise, information that the ability to explain the risk, to insurers, just having that, ability, you know, for us to demonstrate the knowledge why this is the best-in-class projects. And having that open, and to the discussion and that tripartite relationship, not just between us and the broker, and the insurance market, but bringing the client, or prospective clients along for that journey. As a client, you know, you project better than anybody else, and you can articulate that project and the nuances of that project better than anybody else. So why not have them in the room with the key insurance markets? Risk engineering, is also very key the analytics and risk engineering that, that we can provide, a second to none. And, you know, we do fine running. You know, the risk in analytics than that cat studies, the DSU, limitation, studies, etc. really do help us, differentiate and articulate the exposures to a client, and to the from a client. Sorry
Trent Williams: Right. Good advice. Great to have a chat with you today. As I said, you've joined a great team in Asia. So we look forward in checking in, back in, Q1 next year and see what your forecast for the year ahead looks like. Thanks for your time.
Mark Thompson: All right. Thank you Trent.
