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Energy Marine Exposures Q1 2021

Update on marine insurance market trends through Q1 2021
Oil platform on the ocean. Offshore drilling for gas and petroleum. Supply vessel alongside. Industrial

29/04/2021

The rapidly escalating pricing of the last few years has now settled into a more consistent and predictable pattern as capacity withdrawals, and syndicate closures, diminish. Despite this, most insureds are looking at low, double digit increases in the near-term.

Underwriters are disengaging with accounts that have a poor loss record, limited spread of risk, low premium level or deductibles that are perceived to be inadequate. On larger or better performing accounts, leading underwriters are balancing the interests of the following market, with the risk of losing a favored client. Often, following markets are only prepared to support a competitive lead-line with higher alternative pricing, and there can be high uncertainty about the final price until the end of the placement process. In this situation, accounts that have regularly changed insurers are unlikely to receive any preferential treatment.

NEWSLETTER

The Energy & Power Newsletter

April 2021 Energy & Power Newsletter considering the insurance trends over the last quarter.

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Overall, focus continues on deductibles, with terms and conditions continuing to tighten, and the inclusion of increasingly standard clauses such as:

  • Automatic identification system (AIS) operation clause which aims to detect whether a vessel enters the waters of sanctioned countries (a policy exclusion), or enters a high-risk area (a war breach exclusion requiring additional premium to reinstate coverage).
  • Revised cyber clauses to clarify the issue of silent cyber coverage.
  • Communicable disease exclusions to address pandemic type events.

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“Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”