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Growing need for data in London Market: Amwins

2nd September 2021 - Author: Matt Sheehan

As part of a new report on the state of the London Market, analysts at Amwins have pointed to a growing requirement for greater levels of data, analytics and insight.

The observation comes on the back of a challenging 18-month period for the London Market, which has faced a worldwide pandemic, greater incidence of weather and natural catastrophe events, and many other issues.

Reflecting on this market of the Q2 and Q3 periods of 2021, Amwins notes that the double digit property increases many insureds have experienced over the past few renewal cycles are now being replaced with single digit or even, in some circumstances, flat rate renewals.

However, this is being treated by markets on a case-by-case basis and is often dependent on loss experience and the previous year’s rate movement.

And contingent on how active the 2021 hurricane season is, analysts believe that this trend will likely continue for the remainder of 2021 and well into 2022.

Other areas to be significantly impacted by the pandemic include transportation lines such as inland marine and cargo, which Amwins sees as having changed for the better over the past several months.

“There has been a lot of movement of cargo underwriters and underwriting teams that will ultimately push rate increases down. Going into next year, these new market entrants should drive flat renewals where loss records allow,” analysts stated.

Rates for aviation have also somewhat stabilized, with an average increase of 10% on most accounts, but increases of 20-30% for risks with high claims loss activity.

“It remains to be seen if this stabilization is premature, as international travel resumes post-pandemic,” Amwins added. “However, the valuation of aircraft being reduced as they age will help to reduce overall exposure.”

Turning to energy lines, risks involving fracking, oil sands, geothermal and saltwater disposal (SWD) tanks remain challenging to place in the London market due to limited appetite.

Overall, rate increases remain at 5-10% on clean upstream business, though up in the 10-12.5% range for midstream accounts, the report says.

Further areas of interest in the London Market include cyber and tech lines, where the increase in size and frequency of ransomware losses has significantly impacted the London cybersecurity market in appetite and capacity, according to Amwins.

As well as the inevitable increases in premiums and retentions, this trend has resulted in a number of restrictions, including a shift from writing primary to excess, sub-limiting and coinsuring ransomware coverage on a case-by-case basis, fewer markets now writing tech E&O, and many firms excluding some business altogether.

On healthcare, Amwins observes that the long-term care market in London has become subject to higher premiums and self-insured retentions, with minimum retentions of $100K.

And while COVID-19 exclusions are being added across the board for long-term care, in allied healthcare these exclusions are added on a risk-by-risk basis.

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