LLOYD'S GEARS TO MEET CHALLENGES OF A BURGEONING SOVIET MARKET

LLOYD'S GEARS TO MEET CHALLENGES OF A BURGEONING SOVIET MARKET

Lloyd's of London is preparing to meet the challenges of a burgeoning Soviet insurance market.

"We don't sit around beating our brains out to figure what will happen next here," said Lloyd's chairman, Murray Lawrence. "But the growth potential is enormous."So far Lloyd's is seriously thinking about providing "satellite insurance and import-export guarantees," Mr. Lawrence said in an interview last week. This would supplement their existing marine and aviation insurance portfolio in the Soviet market.

Mr. Lawrence was in Moscow exploring the potential opportunities for providing insurance in the changing Soviet marketplace. During his visit to the Soviet Union last week he met and traveled with Mikhail Safronov, chairman of Ingosstrakh, the international Soviet insurer.

Mr. Safronov observed that his country has seen "a very big move toward buying western equipment.

"We have bought Airbuses, some Boeings and since we are reinsuring mainly our aviation equipment with Lloyd's, this is likely to expand."

Gosstrakh, the state insurance company of the Soviet Union, has held monopoly control of the insurance industry in the U.S.S.R.

Lloyd's faces problems associated with monopoly control of the Soviet insurance industry, because whatever happens and wherever it happens in the Soviet Union, Gosstrakh was historically the insurer of record.

"Gosstrakh would get the whole damn thing wherever the claim happens. It would be a very difficult problem, but not impossible to overcome," said Mr. Lawrence.

In principle, there is not now a monopoly, because now there are many small insurance cooperatives scattered around the Soviet Union.

One such cooperative is Dalrosso, based in Vladivostok, that is presently providing insurance for limited shipping lines and fishing fleets in the Far East.

But thus far, these insurance cooperatives are small and lack the

financial resources to dent Gosstrakh and Ingosstrakh's control of the industry.

"The problem is that there is no insurance infrastructure here," said Mr. Lawrence.

But Mr. Safronov said that "there will soon be a major breakthrough in the Soviet insurance industry from Gosstrakh. An insurance law will likely be presented to the Supreme Soviet, the government's parliament, later this year, he said.

A report in last week's issue of "Arguments And Facts", a Soviet newspaper, included figures on the present state of the Soviet insurance industry.

It is remarkable how underdeveloped Soviet insurance is, according to the report, which said that 34 percent of Soviet citizens don't have life insurance, 74 percent don't have accident insurance, 51 percent don't insure their homes, 60 percent don't insure their property and 62 percent don't insure their cars.

In fact, insurance comprises only 3 percent of the Soviet Union's national income, whereas in western countries it can comprise 15 percent or more.

"The potential for expansion of insurance in the Soviet Union is tremendous for life, private values, houses and automobiles," Mr. Safronov said.

Mr. Safronov said that the new law on insurance to be presented later this year will "determine how the national insurance market should operate."

Components of that law will include supervisory control, licensing of companies, capital requirements, solvency rules, accounting practices, tariff control and rules on unfair competition.

Lloyd's underwriters in the fields of marine, aviation, satellites, joint venture property and reinsurance are expected to visit the Soviet Union in the upcoming months.

"The time has come to give greater scope to cooperation, including on the basis of the principles of joint enterprise," Mr. Lawrence concluded.

''As we see a move to private ownership," Soviet citizens will have to educate themselves, Mr. Lawrence interjected. "It's going to be an educational job for each private person (to learn) that it makes sense to insure his house and to protect his assets against disaster."