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Survey Report

Insurance Marketplace Realities 2021 Spring Update – Marine hull and liability

Marine
N/A

By Phil Gran | April 21, 2021

Conditions remain hard for cargo. For hull, 2020 was one of the hardest marine markets in more than 20 years.
Rate predictions
  Trend Range
London and international markets
Hull and machinery, good loss records: Increase (Purple triangle pointing up) +10% to +15%
Hull and machinery, poor loss records: Increase (Purple triangle pointing up) +20% or more
P&I clubs 2021: Increase (Purple triangle pointing up) +5% to +10%
P&I clubs 2022:   pending mid-2021 update but likely unchanged from 2021
Marine liability: Increase (Purple triangle pointing up) +15% or more
Domestic markets
Hull and machinery, good loss records: Increase (Purple triangle pointing up) +10% to +15%
Hull and machinery, poor loss records: Increase (Purple triangle pointing up) +20% plus
P&I insurers: Increase (Purple triangle pointing up) +10% to +20%
Primary and excess marine general liabilities: Increase (Purple triangle pointing up) +10% to +20% (greater if crew exposure exists)
USL&H Mutuals: Increase (Purple triangle pointing up) Flat to +5%

Key takeaway

The marine market remains hard, with underwriters still seeking increases on clean business while imposing cyber and COVID-19/communicable disease exclusions on policies that did not see them in 2020.

In both domestic and London/international markets, rate increases may be higher for accounts that insurers view as underpriced given current market conditions.

  • London markets are looking to strengthen current COVID-19 exclusions.
  • Large limits in London are under much closer review and subject to larger increases.
  • On difficult risks, London is not the easy answer that it was; more underwriting data and understanding of the risk is required.
  • Changes in capacity are impacting the U.S. market, with quota share structures becoming more the norm.
  • Markets are continuing to review the capacity they deploy, with reduced line participation, especially on excess layers.

Underwriting in the current environment is demanding.

  • Underwriters are requiring substantially more data for renewals and new business.
  • The high number of buyers marketing their business is overwhelming underwriters, whose time to review is limited.
  • Underwriters remain under scrutiny by their senior management. This negatively impacts the renewal process from the buyer’s perspective.

Light at the end of the tunnel?

  • Although increases are still being demanded by underwriters, these increases may be leveling off or at least decelerating and underwriters are relaxing, although liability rates may still be hardening.
  • Underwriters are starting to be more aggressive in efforts to win back business they lost due to knee jerk reactions during 2020, especially in London.
  • We expect more buyer-friendly trends during the second half of 2021.
  • We will be watching closely to see what losses develop from the Suez Canal closure after the grounding of the Ever Given.

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.

Contact

Phil Gran
Shipowners Leader-North America

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