Lead Lloyd’s underwriter has stopped quoting new business
Catlin is pulling out of the loss-making waste and recycling sector after five years.
Catlin was the lead underwriter in Lloyd’s, but senior class underwriter Colin Panzetta told industry magazine Materials Recycling Weekly that it stopped quoting new business on 3 April and would honour renewal policies for 30 days.
Claims payments outweighed premiums, in part because of “an unprecedented amount of waste fires,” he said.
Direct Insurance London Market, a wholesale broker which runs a waste and recycling scheme, said it had been inundated with calls from brokers looking to arrange alternative cover for their clients.
But chief executive David Bearman warned that poor risk management by recycling companies meant its scheme would be unlikely to accept all the risks Catlin had written.
“There are lots of brokers out there with recycling clients needing a home.
“Some of them will be left without building cover,” he said.
The number of fires in the sector has risen as the amount of waste sent to landfill has reduced. Instead, factories are extracting more of the valuable components in waste and shipping the residual part for overseas incineration. This means recycling companies need to improve their waste storage abilities, Bearman said.
Bearman said Direct Insurance’s scheme, which is underwritten by Nationale Suisse and Millennium Insurance Company, wants clients who invest in risk management and risk mitigation techniques such as fitting fire detection cameras.
“We follow a very stringent process before accepting each risk.
“Our appetite is for companies that see investment in risk management as claims avoidance rather than an upfront cost of insurance.”