Miami Dealing For Lloyds Of London Presence
Written by Risa Polansky on November 8, 2007
By Risa Polansky
In a move he believes would lower local commercial insurance rates, Miami Commissioner Marc Sarnoff has begun a push to lure part of Lloyds of London to Miami.
"In order to have lower (insurance) rates, you have to have more competition," he said, forecasting Lloyds’ presence here could lower rates in Florida 20% to 25%.
The London-based insurance market, made up of many cooperating yet competing risk-underwriting syndicates, is one of the world’s largest providers of surplus and specialty lines insurance and reinsurance.
An attorney by profession, Mr. Sarnoff represents Ace, one of the biggest of Lloyds’ insurers.
He has just started "creating a committee to form a package of incentives" to attract the powerhouse insurance market to the city, he said, declining to name its members.
Enticements would likely include, in addition to building incentives, waiving the state’s Surplus Lines Tax and possible federal inducements, he said.
"It’s got to be financially viable for them to come here," Mr. Sarnoff said, and state officials would need to be involved.
He has engaged Florida Chief Financial Officer Alex Sink, who could orchestrate with state officials the needed incentives, he said.
As CFO, Ms. Sink oversees the state’s Department of Financial Services, which encompasses the former Department of Insurance.
According to her staff, she is currently in London in discussions with Lloyds but will be available for comment after the trip.
Should Lloyds agree to come to Miami — where it could focus also on Latin America — the operation would likely employ 600-1,800 people, Mr. Sarnoff said, most of them earning "very high salaries" — he estimates about $80,000-$300,000 a year.
He envisions a building with exchange on the ground floor and offices and residences above.
"I would like it to be in Brickell," he said, or at least "somewhere around the banking institutions."
The Brickell area is in Mr. Sarnoff’s district.
Negotiations are likely "to take a while, probably 18 months to two years," he said. The deal is "something that has about a million working parts — it’s very complicated. The chances of success are probably one in seven, one in eight, but it’s time to see if it can be done."