The impact of years of low marine rates and losses has come at a long-term cost
After a year which saw large numbers of underwriters leave the marine market, the International Union of Marine Insurers (IUMI) are hoping there will be calmer waters.
However, its president warned that the impact of years of low rates and losses has come at a long term cost.
Speaking at the end of the organisation’s winter meeting in London, Richard Turner acknowledged that the market has seen some pressure.
The marine classes have and continue to be prominent in the Lloyd’s clampdown on poorly performing business, and the clampdown came as other underwriters took the decision to withdraw from marine classes as rates remained unsustainable.
Asked whether he felt Lloyd’s decision to focus on the marine classes and reduce their underwriting exposure had weakened London’s position as a global leader in the marine classes and restructured the sector, Turner said the issue was a more complex one.
“Capacity accessing or exiting the market is not a structural issue,” he replied. “There is always an ebb and flow as we react to the pressures of supply and demand.
“IUMI’s role is not to voice an opinion or apply any pressure on the market participants or their underwriting decisions or seek to influence what the market looks like.”
He did say however that the implications of the withdrawal of capacity are wider than the immediate access to cover.
“I don’t believe that the marine sector is any different from other speciality lines which have also had their challenges. What I would say is that sadly we have seen a great deal of expertise lost to the market and that is always disappointing.”
A total of 21 underwriting entities exited the marine classes in 2019 and the first month of the year has seen further departures in the UK and internationally, include Beazley exiting UK marine classes and NMU withdrawing from marine trade covers.
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