Horses and courses: Global insurer lifts lid on equine insurance

Arabian thoroughbreds to pony clubs

Horses and courses: Global insurer lifts lid on equine insurance

Insurance News

By Daniel Wood

“Our more specialist areas include equine and livestock,” said Andrew McMellin (pictured above). “It's a pretty small market worldwide, frankly.”

McMellin is Markel’s London-based managing director for wholesale international. According to its website, the diverse Markel Group includes an insurance division but also building supplies and bakery equipment firms. The US-headquartered company has about 20,000 employees across the world.

The firm reported gross premium volumes of more than US$10 billion for 2023 so equine and livestock insurance is not a large part of the operation.

“It’s probably our smallest area with about US$60 million worth of business,” said McMellin.

Race-horse owners, stud farms and zoos

However, Markel’s offering in this sector still has an international footprint. Race-horse owners, stud farms and zoos across England, Europe, the US, Canada, New Zealand and Australia are some of the firm’s customers and not only for insurance coverages.

“We're doing bloodstock and that can be anything from Arabian thoroughbreds through to your pony clubs,” said McMellin. “We have a livestock business in the US which is looking at, for example, cattle and chicken farms and introducing animal pharmaceutical products and trying to sell direct to farmers.”

Equine insurance offerings in the US and Australia, he said, are mainly organised through London brokers and agencies. For the European side of this business, according to the website, a dedicated equine insurance team in France provides the covers directly.

Mortality risk covers for horses and livestock

Insurance Business asked what sort of coverages a horse owner needs.

“It can be for mortality risk, so if the horse dies,” said McMellin. “Stud farms can get coverage for their risks too so studs would obviously be covering the foals.”

He said there’s also an element of liability insurance in these offerings.

“If you run a pony club and you've got visitors coming in to ride on the ponies, they can get kicked off the pony and injure themselves, so this provides liability cover,” said McMellin.

He estimated that Markel has an equine market share focused on thoroughbreds and mortality risk of about 30%.

Chicken farms and hurricanes

Livestock insurance offerings, he said, also cover the mortality of the animals.

“For example, if they get diseases on chicken farms, or if a chicken farm gets hit by hurricanes or storms, that sort of thing,” he said.

Expensive horses have rich owners

One challenge, he said, can be convincing the horse owners to buy insurance.

“A lot of horse owners don't buy the cover because they don't perceive it [mortality] to be a particular risk,” said McMellin.

Other thoroughbred horse owners, he said, are so wealthy they don’t see the need.

“When you get up into the Arabian thoroughbreds, they’re just so rich they don’t need the cover, frankly,” said McMellin.

Markel also invests in some very expensive horses.

“We subscribe to some of the big valued horses,” he said. “We’ve got a small share of a horse that is worth, I think, US$50 to US$60 million.”

APAC expansion plans

McMellin said his firm has big Asia-Pacific (APAC) expansion plans. The region’s business, he said, is currently worth about US$140 million to Markel. The aim is to convert that to US$500 million during the next five years.

“That’s by growing out all our key locations in Asia,” said McMellin. “For us, that starts in Dubai, runs through Mumbai in India, goes through Kuala Lumpur in Malaysia, Hong Kong, Shanghai, Singapore and now we’ve added Melbourne, Sydney and Brisbane.”

Taking the long-term view

In September, Markel’s boots-on-the-ground presence in Australia began gathering real steam with the opening of offices in Sydney, Melbourne and Brisbane.

Earlier this month, the firm launched a professional indemnity (PI) offering for Australia. According to a media release, the coverages are focusing on professional and financial risks in areas such as renewable energy.

Rory Morison, Markel International’s new managing director in Australia, said his firm takes a very long-term view.

“Firstly, we wanted to show intent because one of the big questions being asked is, ‘are you serious about this or not?’” said Melbourne-based Morison. “We also wanted to be crystal clear: ‘yes, we’re here for the long term.’”

“The long horizon that Markel as a business looks at for success, is to be a forever company,” he said.

Are you a broker involved in the equine and livestock sectors? What are your insurance challenges? Please tell us below

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