Marine insurers wary of cutthroat competition

Marine insurers wary of cutthroat competition

Littlefield

   The claims picture in the marine insurance sector is “very worrying,” International Union of Marine Insurance President Deirdre Littlefield said this week, warning underwriters may cut rates to maintain market share.
   “The shipping industry generally is admitting that conditions remain dire and short-term prospects bleak. Every sector is in trouble despite one or two bright spots. A lot of companies have already folded or filed for bankruptcy, and more will follow,” said Littlefield, speaking at the IUMI annual meeting in Bruges, Belgium.
   'This is putting considerable pressure on marine insurers who are trying to cope with greatly reduced ship and commodity values, and far fewer ships trading as an increasing number go into layup or lie idle, not to mention a rise in claims resulting from an increase in costly partial losses, returns of premium for vessels in cold layup, and the leaking of money down the seemingly bottomless piracy drain.” said Littlefield, senior vice president at Starr Marine Agency Inc. in New York.
   'The number of total losses may have stabilized, but overall the claims picture is very worrying. Repair prices remain high, which may put further pressure on owners to defer essential repairs and maintenance, to the detriment of underwriters,' she said.
   Littlefield said capacity in the marine insurance market is “more than adequate. The danger now is that many underwriters will be tempted to cut rates and make other concessions in order to maintain market share as the amount of new business available continues to dwindle.”
   'We have seen this cutthroat situation before, of course, but never at a time like this when the shipping industry is literally on its knees. I sincerely hope that the several hundred underwriters joining us in Bruges will not ignore the danger signs. The hull renewal season will soon be on us, and we must all assess risks and set fair prices in a disciplined and responsible manner and aim for stability,” she said.