Insurers battle for market share in SME sector
A price war has erupted in the directors' and officers' (D&O) market, according to Lloyd's underwriters.
One leading D&O insurer said rates were being cut by up to 30% by "aggressive" underwriters battling for market share in the SME sector.
He said Ace, HCC Global, WR Berkley and Catlin were among the insurers slashing prices.
But Catlin, HCC Global and WR Berkley denied they were undercutting prices by 30%.
An Ace statement said: "As an acknowledged global provider of D&O cover to multinationals and SMEs alike, brokers and clients are attracted to Ace for the strengths of its comprehensive D&O proposition, including its underwriting expertise, its dedicated Financial Lines claims team, extensive regional branch network and efficient use of technology."
A Catlin spokesman said: "We're not making big waves in cutting rates. We don't see why anyone would want to cut rates - there's no reason to cut pricing as there's not that much capacity."
WR Berkley underwriter Simon Mepham said: "We are not in the business of cutting rates. We are targeting good quality SME business and we've got off to a good start, but it's not as a result of rate cutting."
But a leading Lloyd's D&O underwriter said: "Our D&O income will be down 10%-15% as Ace, HCC, WR Berkley and Catlin are being very aggressive with rates 30% off in some cases."
The D&O market for UK SMEs has become increasingly competitive in 2004.
Last month it was revealed that WR Berkley would enter the sector writing mainly SME risks in the regions.
Meanwhile, Catlin Insurance Company, which was launched in January, is targeting around £150m worth of specialty lines business, including D&O, in its first year.