In general terms primary rates on global marine and energy covers were flat. Despite the relatively recent large losses that occurred even energy rate increases tailed off somewhat. There were no specific moves to increase primary rates, which filtered through to marine reinsurance placements, where individual accounts were treated on case by case bases. There did not appear to be any particular areas where reductions were seen. These only occurred if there were specific extenuating circumstances. Marine ILW contracts were one area where pricing and attachment levels increased, primarily driven by the Costa Concordia loss. The original loss reserve recently increased to the USD1 billion level.
Posts Tagged ‘marine’
July 1 Reinsurance Renewals Reveal Plentiful Capacity amid Benign Catastrophe Activity, According to Guy Carpenter
At least six people died after a luxury cruise ship carrying 4,229 passengers and crew ran aground off the Italian west coast on January 13 in calm weather conditions. Italian, Spanish, German, French, British and American nationals were reported to be among the 3,200 passengers on board the vessel. The 290-meter-long Costa Concordia was on a trip around the Mediterranean when it hit rocks near Isola del Giglio off the Tuscan coast, ripping a hole in its hull and prompting a major rescue operation. A large gash can be seen in the ship’s hull but officials said its fuel tanks did not appear to have been damaged, lessening the danger of an oil spill.
London Market Excess Loss (LMX) & Global Retrocession
April 2011 and prior renewals with energy (particularly, energy liability) experienced exposure paid rate increases of approximately 20 percent. This represented the first opportunity to re-rate since Deep Water Horizon (DWH). Pricing for non-energy classes remained flat but with little downward pressure. Following the Gryphon loss in April, the energy market hardened further. While there are relatively few excess of loss placements renewing at this time, the perception in the market was that rates are likely to harden further where energy related coverage is sought. There has been very little demand for any additional Gulf of Mexico wind limits prior to the wind season, as original rates remained static and insurers maintained or reduced their aggregate. Retro renewals outside the January 1 renewals are rare, but those that did happen paid increases similar to those at January 1 - between 20 percent and 25 percent. Marine industry loss warranty covers tend to attach mid-year and renewed generally at expiring rates. They experienced rate increases following DWH and generally were in excess of any potential loss from Gryphon ‘A’.
Guy Carpenter & Company announced the expansion of its Global Marine & Energy Specialty with a number of key appointments. Effective immediately, Scott Price has been named Head of U.S. Marine & Energy, reporting directly to James Summers, Head of Global Marine & Energy Specialty. Steve Vivian, also reporting to Mr. Summers, has assumed a new role with responsibility for assisting in the development of the Specialty’s global marine business.