Lloyd's underwriters are abandoning blanket policies, replacing them with named-peril cover instead.
Others are reducing risks by restricting the underwriting authority of agencies and are reducing costs by putting technology contracts on hold.
Managing agency XL Brockbank is requesting coverholders return all risks to London for approval. A spokesman said: “In the wake of the tragic events of September 11, we have sought to restrict delegated underwriting authority. This is a move to ensure tighter underwriting control procedures apply to all aspects of our business.”
BMS Harrison & Dixon reinsurance managing director Steve Higginson said: “Coverage is only provided on named perils and there are no automatic extensions.
Higginson added if a broker had to give more favourable terms to an insurer to complete a slip, the lead and other underwriters would also want to benefit, even if they had already signed up to the risk.
“Risks have to be placed at the same terms,” he said. “We haven't had those sort of warranties for the past five years. Because of the problems we are facing, underwriters are saying if you have to offer better terms to someone else, our lines are also subject to benefit.”
Saudi American Co. for Cooperative Insurance & Reinsurance (SACIR) managing director Hassan Elkawa said Lloyd's underwriters were being fussy about the reinsurance they underwrite.
“We place most of our facultative reinsurance in the London Market, but we are finding it hard. Daily routines, like placing risks and producing quotations, are becoming more difficult.
“We've had to go back four to five times for some risks, as underwriters are slowing the cycle down. They are also cherry-picking.”
Vice chairman of Saudi Arabian-based insurer Cumberland, Mike Good, said: “The market has been working very slowly in the past two weeks, as people are checking their positions on the World Trade Centre.”
Insurers in the Lloyd's Market and elsewhere are cancelling contracts. One technology consultant said he had lost contracts because of the US events. “Insurers can manage with existing solutions at the moment – they will not sign deals for another few months.”
But Catex European managing director Tom Bailey said: “While some larger infrastructures that are replacing whole systems might be cancelled or put on hold until companies' positions are certain, smaller projects will carry on.
“Our view is that contracts have speeded up.”
