RPC's Hong Kong launch heralds renewed push into Asia from UK's insurance leaders. Suzi Ring reports

If much of the hype surrounding Asia's economic rise has focused on corporate and commercial activity, news this month of seven legacy Hong Kong Barlow Lyde & Gilbert partners exiting Clyde & Co to join a trio of UK rivals is a reminder that the region offers rich pickings for insurance advisers.

The firm hoping to prosper most from the exits is Reynolds Porter Chamberlain (RPC), which has secured four of the partners to launch a local office, leaving Bird & Bird and Simmons & Simmons to pick up the remaining three.

RPC appears to have won a significant prize, landing a team that is well regarded in the region and was often cited by Clydes as a key driver behind last year's merger with Barlows.

However, the office was viewed as somewhat remote from Barlows' UK practice and all seven partners have special deals in place with Clydes that mean they will not be subject to the post-merger exit penalties set out when Clydes and Barlows combined last November.

The deals are understood to have arisen from the fact that the office was not tied to Barlows' London base through capital contributions, with all seven given until March this year to resign before becoming locked into a deal at the merged firm.

The looming Hong Kong launch also comes after RPC opened in Singapore in November with the hire of Barlows insurance and reinsurance partner Mark Errington.

And with a number of additional licence applications still in the pipeline, there is clearly huge appetite among insurance law firms to rapidly expand in the region.

"When we hosted our 'Going Global' insurance conference last year we conducted a survey that showed that Asia, and in particular China, was considered the top potential growth market for insurance companies. Insurers see the European market as mature and cash-generative but, in terms of investment, their sights are set on Asia," says Clydes chief executive Peter Hasson (pictured).

Insurance-focused firms, of course, already have considerable experience in the region, with many setting up in the 1980s and 1990s to handle shipping and construction work.

But the market has moved on substantially in recent years, with Lloyd's of London moving its Asia hub in Singapore to far larger offices as it prepares to meet rising demand for insurance providers to expand their underwriting in the region.

Lloyd's Asian operations have already grown from three businesses to 18 service companies underwritten by 21 syndicates in the last seven years, making it one of the largest work producers for UK lawyers.

Other notable players rapidly growing in the region include Prudential, which announced recently that its Asian business was the biggest contributor to group profits for the first time last year, alongside a threat to move its headquarters out of the UK.

Ince & Co insurance partner Peter Rogan comments: "The economic growth in Asia is outstepping Europe and if you look at the current insurance-buying capability of those countries in Asia they are all very low compared to Europe and the US, so insurers see a lot of scope and are expanding to capture it. Continued development of infrastructure and corporate governance across the region also makes it a very attractive growth prospect for specialist line insurers."

As such, many of the UK's largest insurance law firms are in investment mode, with Clydes and Ince currently waiting for their licences in Beijing with a view to opening later this year.

Kennedys, meanwhile, is exploring its options to practise local law in Singapore and DAC Beachcroft is looking to secure associations with firms in Hong Kong and Kuala Lumpur to accompany its Singapore office.

"In the last six months there has been a notable recognition that the European and US economies are not going to recover anytime soon, so firms are looking to maximise their coverage in Asia – any law firm with a global strategy has to," says Rogan.

With 18% of Ince's global turnover contributed from its Asian arm in the last financial year, the firm is optimistic it will have grown over the last 12 months, while Clydes is already forecasting that its £12m revenue from the region in 2010-11 has increased by around 40% over the last year, not taking into account the Barlows merger, as the firm continues to invest.

"For a long time people considered Hong Kong as the gateway to China, but that's not the case anymore. Having a presence in mainland China demonstrates a real commitment to and connection with the country. This is as critical for outbound work as it is for inbound," says Hasson, regarding the firm's current Beijing licence application.

However, geographical spread is also dependent on the varying areas of insurance work being targeted. For Kennedys a focus on high-volume work has seen it concentrate its operations in Hong Kong and Singapore, but there are no current plans to take this further into mainland China.

Meanwhile, the Lloyd's relationships act as the major draw for RPC, which is also looking to move into Singapore's much-tipped arbitration market.

However, for Clydes and Ince there is also the scope to pursue a wider range of work, with trade and marine work featuring highly on their agendas.

The youth of the Asian market is much of the lure. With the UK arguably the only major legal market to build an internationally ambitious band of insurance-focused law firms, advisers like Clydes spy the opportunity to carve up a relatively untapped market. As Hasson puts it: "There are relatively few insurance specialists in Asia and we are going to take advantage of that."