The key themes for the marine re/insurance market at the January 2020 renewals were a retraction of capacity, rate increases, job losses, and a keen approach to risk selection, according to Marsh JLT Specialty.
Analysts noted that a major feature of the market last year was the speed at which a number of both Lloyd’s and London Company markets withdrew from marine classes, or ceased writing business.
This retraction of marine capacity had a profound effect on rating levels, as well as the appetite of those carriers left within the marine market.
The trend also rippled into the overseas markets, particularly in Asia, and caused withdrawals from some major companies, such as Allianz, which withdrew from the US and Singapore.
The result, according to Marsh JLT Specialty, has been a sharpening of risk selection at the latest renewals, and more careful selection of which risks they are prepared to give out their capacity.
With the marine Lloyd’s syndicates currently undergoing their business planning for 2020, the firm plans to monitor whether there will be a repeat of the process seen towards the end of 2018, which resulted in a number of plans being rejected by Lloyd’s.
Analysts noted that the Marine Liability market has enjoyed a more stable period than Hull and Cargo, but is now beginning to see a slight retraction in capacity, which will inevitably bring with it the rise in rates and careful risk selection.
However, Marsh JLT Specialty believes that insurers in this space are not afraid of removing capacity from accounts they have written for some time, and observed that some have also started implementing minimum premium levels for their shares.