2020 saw the continuation of rate increases and coverage restriction as markets attempted to recover from a string of unprofitable years. This came as no surprise to the experienced players such as ourselves who have been arguing for more market rigor in technical underwriting.

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The changes within the dynamics of Lloyd’s continued, with many syndicates withdrawing from the Marine Cargo space and aligning capital with other sectors that they feel will generate a greater return. The company market is still proving itself more than able to match clients’ requirements for coverage and capacity. Furthermore, there has been a marked shift in London market underwriting philosophy to higher technical standards and a diminished emphasis on top line growth.

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Looking forward to 2021, we expect to see re/ insurers moving back into the Marine Cargo area as results improve as pricing has become reflective of exposure rather than designed to satisfy budgetary requirements. This may take the form of syndicates opening their Marine Cargo books again, or more and larger MGA operations being established.

 

We still see the possibility of large losses increasing as vessels continue to get larger and carry more cargo in a single sailing, with mis-description of cargo still a major issue. There are several working groups within both the insurance and shipping industries attempting to find a solution to this issue, but this is going to take time and money, so there is no immediate solution on the horizon.

 

The push for a carbon neutral shipping industry continues to drive a lot if innovation, with various alternate fuel types being tested for vessels of all sizes, however the sulphur fuel cap has seen a lot of vessel owners opting for scrubber systems, rather than retro fitting engines to burn the new, cleaner fuel.