Marine hull underwriters summoned to explain poor performance

The Lloyd's franchise board is understood to have convened a meeting of Lloyd's marine hull underwriters to discuss the poor performance of the marine hull market.

The market has not made a profit since 1996, and its global losses last year amounted to $750m (£468m).

The meeting with the franchise board was held amid criticism of the Joint Hull Committee (JHC), which has been accused of "poor leadership".

One chief executive at a Lloyd's managing agent said the meeting was called because the marine-hull community in Lloyd's "has done a great job in disguising the horrendous results of its market, which has been terrible over the past six years".

He added that "poor leadership" on behalf of the JHC was one of the main reasons that rates had failed to harden.

"The problem is that no one in the marine hull market has got the guts to quote the right price and risk losing the business," said the source.

"Marine hull underwriters should stop trying to hold on to market share. We often have the ridiculous situation where the underwriter says to the broker, 'Get me a 100% rate increase,' the broker then comes back and says he can't do it. So the underwriter says: 'Try and get me around 50%.'

"It's obvious that there's a massive credibility issue here."

A JHC spokesman admitted that some underwriting in the marine hull market was poor, but argued that it is the responsibility of each underwriter, rather than the JHC, to address this issue.

"While some of the underwriting is probably not up to scratch, criticism should not be aimed at leaders as each risk is a matter of individual interpretation."

Earlier this month, JHC chairman William Beveridge said that there would be "no reason" for capital to stay in the marine hull business unless rates hardened "fairly rapidly".