The London cargo market continues to prove its stability to assureds in 2024 due to increased capacity, new entrants trading more actively since early 2023, a relatively static January reinsurance treaty renewal season, and more balanced profitability booked over the past few years. However, insurers’ reaction to geopolitical conflicts may require creative solutions and persistent negotiations to ensure appropriate protection.
Favourable conditions for buyers
An overall upbeat market environment has resulted in Lloyd’s syndicates looking to grow their market share. Renewals are generally treated as ‘flat’ on prior year’s rating, assuming no major losses or other factors have influenced the client’s risk profile.
In addition, we’re increasingly seeing more competition for new business, with many carriers showing less restraint on offered capacity in relation to premium while creating new and innovative products to set them apart from their competitors.
It is also worth noting that a great proportion of the growth in the cargo market has been caused by the restructuring of traditional property placements which saw inventory risks moving into a Stock Throughput product underwritten in the marine cargo market – a concept which has been around for many decades but became increasingly popular during the last hard market cycle in the property market (mainly US).
New syndicates/start-ups:
Sirius has re-entered the cargo market
Axon Underwriting has opened a London office
New consortiums set up in London:
Build Consortium - Brit/RSA for project cargo and Delay in Start-up (DSU)
Chubb Battery Consortium
As is usually the case when capacity and competition increase, underwriters have been moving jobs more frequently, including:
Joanne Reynolds has joined Axis.
Ben Farley has joined Axis.
Ryan Godfrey has joined Sompo.
Rachel Waker has joined Liberty.
William Warden has joined Talbot.
Richard Grant has joined Aviva.
Leigh Meekings has joined Everest.
Brendan McCarthy has joined Everest.
Underwriters currently serving their notice:
Gavin Wall (Ex-Ascot)
Chris McGill (Ex-Ascot)
War risks
The continuous events in Russia and Ukraine, alongside recent events in the Red Sea, have created new supply chain disruptions. This is driving insured values higher for Stock Throughput risks, requiring more capacity.
Meanwhile, some markets have issued Notices of Cancellation in respect of war coverages because of the events in the Red Sea and Israel-Gaza. However, this seems to be through an improved and more calculated method rather than just blanket notices issued to clients with no exposure in these regions.
We are closely monitoring geopolitical developments, but since the conflicts show no signs of quick resolution, we are anticipating cargo insurers to issue more war, strikes, riots or civil commotion (SRCC) cancellation notices to cargo policyholders. There is usually a seven-day notice period to cancel and opt for reinstatement of the affected regions. If your insurer doesn’t offer a war reinstatement or the offer is not competitive, we have a Cargo War Facility that may cover all war related risks. This facility can, for example, include:
USD250 million limit for cargo and USD400 million for hull
No combined single limit between hull and cargo interests
Ability to cover Russia/Ukraine/Belarus risks with USD100 million limit each section
We recommend looking for alternative options only if the reinstatement offered by your insurer is not competitive.
For further information, please contact:
Peter Hall, Head of Cargo & Logistics
E. peter.hall@lockton.com
Jack Barker, Senior Broker
E. jack.barker@lockton.com
