Falling rate fears won't drive major insurer out, says top rival
by Jason Woolfe
Fears that Berkshire Hathaway will pull out of the aviation market are unfounded, according to a leading rival.
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Falling rate fears won't drive major insurer out, says top rival
by Jason Woolfe
Fears that Berkshire Hathaway will pull out of the aviation market are unfounded, according to a leading rival.
The group's decision to stay in or quit the sector has an enormous influence on prices.
Together with AIG, Berkshire Hathaway is said to account for half the world's aviation capacity.
Charles Philipps, chief executive of major Lloyd's aviation insurer Amlin, said the group would hang on in the Lloyd's aviation market for the crucial fourth quarter, when the vast majority of major airline risks are renewed.
Unlike some aviation insurance watchers, he argued such a move would not necessarily mean downward pressure on prices.
"I would put them into the category of what I would call disciplined underwriter," he said.
But the US group, led by billionaire investment guru Warren Buffett, would nevertheless have its work cut out to change attitudes within the market and prevent a return to loss-making prices.
Philipps said: "They probably have a culture change issue. Historically, there has been a focus on premium growth rather than profit growth and that's something I would expect the likes of Berkshire Hathaway to concentrate on."
He said Amlin was "not too worried" if the group kept playing the aviation market through its diverse investments at Lloyd's.
Amlin Aviation achieved an 11% average increase in rates for business renewed in the first half of 2003.
Renewals made up nearly 84% of the £35.8m of aviation business it wrote in the period.
