For the last 10-15 years, the cargo insurance market has been ’soft,’ a.k.a. a buyers’ market. Plenty of capacity. Competitive pricing. And insurance carriers were offering up lower deductibles and policies with generally favourable, increasingly broader terms. Soft market conditions do not bode well for carriers’ profitability and financial strength, however. This is why, starting in 2019, the cargo insurance market began to change as losses took their toll.
Today, the cargo market is in a state of distress and correction. While Lloyd’s of London is still a hub for marine cargo risks, Lloyd’s issued a directive to its syndicates that they must improve their profitability or exit the market. Many insurance carriers have withdrawn from certain marine lines of business including cargo.
Produced by AXA XL, this article focuses on the state of the cargo insurance market in 2020 and the challenges faced by carriers.
• Smoke on the water.
• The implications of reduced capacity.
• Leveraging reinsurance.
• Making waves with new technology.
• Placing coverage for smaller to medium-size risks.