February
Heath Lambert , State of the Market Report - UK
Credit & Surety
This report reinforces suggestions elsewhere that although 2007 was overall another soft year for rates, by the end of the year the picture was changing, with underwriters expressing little scope for reducing rates.
The year did not see any major catastrophic buyer failures, but the music distribution industry is singled out as a cause for concern during the year.
The market's large selection of underwriters has meant few capacity issues, but selection of risks and trade sectors remains a feature of differentiation. The report also refers to the reportedly varying claims levels experienced during the year by different underwriters.
Easy access to capacity, and high levels of competition makes Heath Lambert believe that the UK market is unlikely to experience the previous scenarios of 20-30 per cent rate increases, despite a worsening claims outlook.
Download the report (pdf) here
Political Risk
New capacity and rates which have been stable, or edging lower, has meant organisations have begun to regard political risk cover as a necessity rather than a luxury. In particular, high oil and gold prices have given expropriation risks in those industries a higher profile.
The report also refers to the 2006 merger of Lloyd’s based insurers Catlin and Wellington which, as predicted, led to changes in the market. Catlin adopted a more restrictive underwriting philosophy and assigns individual country limits to its policies. However, the new Lloyd’s insurer 'Ark', has acquired a number of underwriters from the merged entity and as with the former Wellington underwriting philosophy, does not require sub limits per country.
Download the report (pdf) here