The licence will allow Lloyd's to set up offices in Malaysia. Lloyd's currently writes business in Malaysia via Singapore, London and Labuan, an offshore jurisdiction of Malaysia, the Financial Times reported.
"If you have people on the ground you get better access and a much better understanding of the risks," Lloyd's chairman John Nelson told the Financial Times. "If we look at our performance around the world where we go onshore, our performance improves."
Insurance levels are low in Asia at about 3% of GDP compared to 6% globally, Nelson said.
"We think about 5% of economic losses from disasters [in emerging Asia] are covered by insurance and in the developed world — including Australia and New Zealand — that’s about 40%. As the region has industrialised, catastrophes have created business interruption risks," Nelson told the Financial Times.
Lloyd's said in April that it was in talks with market regulators in Malaysia to set up an office dedicated to 'takaful', the Islamic equivalent of insurance.
The planned office will also enable Lloyd's to target Saudi Arabia and the United Arab Emirates, which together with Malaysia are the largest global markets for Islamic insurance.
Malaysia has been identified as a "key territory" as part of Lloyd's 'Vision 25' strategy, which sets out the market's ambition to become the global centre for specialist insurance and reinsurance.