Tagged: Asia, capacity, London, premiums, shipowner

The recent renewal season highlighted how international insurance markets and shipowners were handling the changing economic conditions, with the London market seeking rises, whilst shipowners pressed for lower premiums, providing opportunities for other markets, such as Asia.

The global downturn’s effect on trade has meant shipowners are facing further pressures to reduce costs, including reducing their premium spend whilst maintaining good quality security.

However, London and other European markets are pressing for rises on all business of between 5% and 10% on Hull and Machinery before any adjustment for adverse records.

Fortunately for shipowners, however, Asia continues to present an abundance of capacity and strong security whilst offering competitive ratings.

The difficulty for many shipowners is in reconciling the high value they place on maintaining long term relationships with their insurers, with the economic imperative of driving down costs.

The result is that we are seeing shipowners willing to move to new markets for relatively minimal price reductions as the necessity to reduce expenses wins the day.

Consequently London and European underwriters have in some instances lost shares.

Moreover, many markets outside of London are now seeking tonnage that falls outside of their traditional appetite in order to maintain premium income levels. This change of approach has created additional options for shipowners that were not necessarily available this time last year.

The continued effects of the downturn continue to keep the need to reduce costs in sharp focus for shipowners. However, the drive for premium increases by the more established hull markets such as London, has given rise to opportunities for other capacity, particularly from Asia, to step in.

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