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Super yacht insurance sales leap as marine market hits choppy waters
Zurich-owned insurer Navigators & General reports 40% rise in superyacht policy sales
Growth driven by fewer insurers covering top end of the market
Turmoil in the sector could further reduce capacity and threaten London’s position as a global leader in marine insurance
Leading yacht and motorboat insurer, Navigators and General (N&G) has reported a surge in sales of superyacht policies as the market undergoes a radical shake-up.
The number of policies bought for vessels between £1m and £10m has increased almost 40% in three years – with sales this year already outstripping 2017.
The Brighton-based insurer, which is owned by Zurich Insurance, put the growth down to a shift in risk appetite among insurers in the marine market, as well as its strategy in the sector.
Charles Knight, Speciality Development Manager at N&G, said, “The superyacht market is undergoing an unprecedented period of change. Over capacity and strong competition has sent rates to an all-time low in recent years. With some insurers charging an insufficient premium to cover losses, there’s been a steady stream of providers withdrawing from the market. Some of these risks have come to us. We underwrite each risk on its own merit but with the end of the year still to go, we’ve already exceeded last year’s figures.”
Knight said growth was also down to enhancements in N&G’s Prestige policy, where it added new wording in 2016, as well as its clearly defined risk appetite, pricing and strategy.
He said that the turmoil in the marine sector could make it harder for superyacht owners to maintain the level of cover they were once used to. “In the London market, brokers are struggling to get line slips filled up. Where lead and follow insurers are being lost at the top end of the market, it’s starting to have a knock-on effect as there is less appetite for risk, and insurers are hesitant to increase their capacity,” he said.
“This is likely to make it harder for superyacht owners to secure the same coverage as before. We could begin to see open market wordings from some insurers becoming more restrictive and the flexible cover of the past sold at a premium.”
Knight added that the changes in the market could trigger an increase in re-broking.
“In an unstable market, it can drive fears that the claims experience will suffer,” he said. “If the worst happens, brokers and their clients want confidence that their insurer will respond and settle their claim quickly. This could provoke clients to review their current insurer and drive an increase in re-broking across the market.”
He also warned that the shake-up in the market could threaten London’s position as a global leader in marine insurance.
“Without the capacity, there’s a danger business will be placed in other international markets instead of London. Overseas markets often rely on the insight of London for referrals and advice, but with some insurers pulling out, it could lose its competitive edge. It’s more important than ever that insurers and brokers work hand in hand to achieve a sustainable and profitable market place.”
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