The marine insurance market will continue to prove a difficult battleground, with specialist advice more important than ever before, according to a Gallagher expert.A combination of the worst natural disaster losses in the history of the insurance industry and unsustainable underwriting profits has seen the marine insurance sector face rising 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,” Stephen Rudman, National Head of Marine at Gallagher said in the brokerage's latest market overview report, which is available to download now.
“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”.
“Underwriters have drawn a line in the sand on their profitability in both lines, meaning that business owners need to act sooner rather than later to secure the best outcomes,” Rudman continued.
Specialist advice key in challenging market
While the marine insurance market is becoming more challenging, Rudman said that it is in times like these that specialist advice from experienced marine insurance brokers becomes integral.
“In a more challenging market, specialist 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 added that marine businesses should look to work closely with their broker to gain the most positive outcome from the hardening insurance market as brokers need to present a detailed picture of a clients’ 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 continued.
“If underwriters don’t have information, they price that uncertainty into the premium.”
This subject is explored in greater detail in the latest Gallagher Market Overview Report, Reflections on a year of change. The report is available as a digital download.