I was very interested and surprised to read Michelle Hannen's article "Food sector rates fall 30%" (10 July, Insurance Times).

Zurich London insures a large number of property risks in the food and beverage sector ranging from large multinationals to the smaller UK companies. We have always treated each risk on its own individual merits. While combustible composite panels have been an issue for the market in general, Zurich London has never been "obsessed" with their removal as the only method of risk reduction.

The insurer takes into account a number of factors in the risk assessment of which the overall risk management approach of the customer is critical. This forms part of our focus on getting the fundamentals of underwriting correct. Ultimately, underwriting excellence is pivotal if we are to generate consistent returns for our shareholders, and peace of mind for our customers, who need to know that their insurance provider is here for the long-term.

We would certainly agree with Aon that those companies that have "well managed risks and focus on fire reduction" through a number of different methods, will see more advantageous terms and conditions - and availability of capacity - compared to those that do little or nothing. Zurich London has always adopted this approach.

We would also confirm Aon's view that existing players are increasing their capacity. However, it is not unusual for insurers to increase their participation at renewal, as they become more comfortable with an improving risk.

Unlike many others in the market, Zurich London was one of the few insurers who remained committed to the food and beverage sector during the recent difficult period. We also remained consistent in the view that we took on the overall risk qualities that we were looking for.

Finally, food and beverage has not been singled out by the insurance industry. All trade sectors have seen substantial increases in pricing and tougher terms and conditions as the insurance market recognised the unsustainability of their previous pricing strategies.

Mark Platten
Property manager
Zurich London

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