Rivals ride rising rates as Lloyd’s abandons some ship insurance

Source: Business Insurance

Thomson Reuters June 24, 2019 (Reuters) — Rivals to Lloyd’s of London are riding a rising tide of marine insurance rates, leaving the 330-year-old market behind after it jettisoned sections of its oldest line of business last year. Premiums for marine insurance, which until 2018 had fallen for years due to rising competition and lower claims, are increasing after a surge in catastrophe losses in the past two years and growing geopolitical tensions. For Lloyd’s, still reeling from two years of losses due to the heavy claims from natural disasters, it will still take 12-24 months before the segment returns to profit, Chief Executive John Neal told Reuters in New York last week. Mr. Neal said that although the sector had performed better in the first quarter, syndicates needed to set “the right price” for the risks and consider whether all types of marine business were insurable after Lloyd’s told its 99 members to cut the worst 10% of their business last year. Broker Arthur J. Gallagher & Co. said in a February report that 10 Lloyd’s syndicates have withdrawn or reduced their marine business. That has benefited the smaller London company market, which operates separately in the City. “We are definitely seeing business from Lloyd’s coming through our door,” said a senior London company market insurer. Marine cargo rates are up 12%-14% this year, Miles Taffs, head of marine and aviation at Lloyd’s for MS Amlin, said, while sources say yacht rates have risen by at least 20%, and by triple digits in some locations.