SSL Endeavour Marine Chairman Roger Spicer brings a boutique independent broker’s perspective on current marine insurance trends, where geopolitical tensions are high on the agenda.
Tensions in the Persian Gulf persist with Iran’s alleged activity brought firmly into the spotlight back in May, following the attacks to ships off Fujairah, and again recently with the taking of a UK flagged tanker.
Potential further escalation, in what is already a tense and volatile situation along a major international shipping route, has prompted the Lloyd’s Market Association Joint War Committee to extended the list of waters deemed high risk to include Oman and the United Arab Emirates, resulting in a direct impact on risk appetite and pricing for marine insurance for vessels operating in this arena, particularly war insurance.
In Venezuela the political situation has meant serious disruption to flows of oil which has impacted vessel owners and operators and led to delays and disputes over the disposition of loaded cargo. Estimated marine insurance losses here have hit the $200 million mark – a further knock to the war market.
Other losses, such as the Lurssen Bremen shipyard loss of 2018, continue to put pressure on rates across marine classes and territories, prompting shipowners, operators and yards to place emphasis on seeking out the best value insurance placements tailored for their risk profile.
Is London losing market share?
Yes. We see London continue to lose its market share to the continental and Asian markets, where buyers are offered more capacity and often better pricing across all marine classes.
Surely we must regain the confidence to produce effective insurance products that respond accordingly while maintaining underwriting discipline? The focus now should now be on resurrecting the historic Lloyd’s marine market, and stopping the exodus of business before it becomes a permanent change in the tide.
Working in the client’s best interest
This solution-driven approach is also a key issue among the broking community, where we seeing an increase in demand for true independence as marine insurance buyers want support in the current complex and rapidly developing environment.
There are boutique brokers out there handling very large, international marine clients, presenting an increasingly popular alternative to the dominant intermediaries thanks to their ability to navigate current challenges in the marine insurance market in an efficient and cost-effective way.
Lloyd’s would do well to focus less on scrutinising the business plans and far more on putting the rapidly developing requirements of marine clients first by showing it can provide comprehensive marine coverage and protection in an uncertain world.
This blog is an abridged version of an article by Roger Spicer which first appeared in Insurance Day on 5th August, 2019, and is reproduced with their kind permission. The original article can be found here for Insurance Day subscribers: