Specialist advice from experienced marine insurance brokers is more important ever as the marine insurance market becomes more challenging, according to a Gallagher expert.
In its latest market overview report, the brokerage noted that the combination of worst natural disaster losses in the history of insurance and unsustainable underwriting profits has led to rising marine insurance premiums over the course of 2018.
“We have seen a substantial amount of capital leave the marine insurance market as underwriters become more selective in the risks they choose to cover,” said Stephen Rudman, national head of marine at Gallagher. “Some have left the market all together. This is consistent with our previous warnings to the sector that the hardening market will bring more scrutiny from underwriters around claims – a reality we have seen played out.”
Rudman said that both hull and cargo markets have entered a hardening phase over the course of 2018 as pricing “will get worse for clients before it gets better,” advising marine businesses to “act sooner rather than later” and to work closely with brokers “to secure the best outcomes.”
“In a more challenging market, brokers add considerable value to the insurance process through a deep understanding of the insurance market and the specific concerns of the maritime industry,” Rudman said, as brokers need to present a detailed picture of a client’s business to an underwriter.
“The more comfort underwriters have around a risk, the more opportunity a broker gets to negotiate broader cover and preferential rates,” Rudman said. “If underwriters don’t have information, they price that uncertainty into the premium.”
Visit Gallagher’s website to download its latest market overview report.