UK Marine Insurance 2012

Transcription

1 Brochure More information from UK Marine Insurance 2012 Description: This report contains an overview of the total size and profitability of the UK marine insurance market. It provides analysis of trends in premium rates and claims, as well as a discussion of the current issues affecting the market. Executive Summary This report contains an overview of the total size and profitability of the UK marine insurance market. It provides analysis of trends in premium rates, distribution, and claims as well as a discussion of the current issues affecting the market. The final section analyzes the key drivers that will affect each of these markets going forward while providing a forecast up to Features and benefits - Data on the size, structure and profitability of the marine insurance market in the UK. - Analysis of the drivers of claims and costs as well as an exploration of growth areas in the future. - A discussion of the main factors affecting the marine market in the future along with forecasts of market size to Highlights There has been a continued increase in the number of UK-owned and flagged vessels as ships ordered before the recession are completed. These ships have contributed to a worldwide glut of shipping and have given underwriters a growing market to write. The main challenge affecting the UK cargo industry is the impact of the recession on cargo levels. As consumers and firms import and export less, the volume of cargo to and from the UK falls. As the number of risks to insure falls, insurers have to compete for ever scarcer risks. Your key questions answered - What are the key drivers and challenges within the UK marine market in 2011? - What are your competitors doing and what are the drivers of growth in the market? - Where market will growth come from and how will economic and claims trends will impact the sector? Contents: OVERVIEW Catalyst Summary EXECUTIVE SUMMARY The marine market is recovering from the effects of the downturn GWP has grown by 196.6m to 5.1bn as the economic recovery continues Marine COR has remained profitable for the past four years Long-term profitable CORs continue to attract capital The UK's commercial fleet is growing A backlog of ship orders has led to increased shipping volumes A growth in UK-flagged shipping is being supported by the UK government UK maritime revenues have performed well during the downturn Most marine sectors have seen a continued soft market Low CORs during have attracted competition to the market Increases in P&I premiums have been minimal from 2010 onwards Low cargo volumes and containerization have reduced differentiation in policy cover Traditional offshore energy is valuable but is in long-term decline Berkshire Hathaway, ACE, and Torus saw strong growth during The marine market will experience weak growth as the market remains soft Profitable CORs and a troubled underlying market will keep premiums from hardening MARKET CONTEXT

2 The marine market remains strong while recovering from the downturn GWP has grown by 196.6m to 5.1bn as the economic recovery continues Global economic turmoil has impacted the UK shipping industry Marine COR has remained profitable for the past four years Long-term profitable CORs continue to attract capital The marine market is composed of a wide variety of sectors Offshore energy has grown to become the largest marine sector The economic recovery has allowed some sectors to reach and surpass pre-recession GWP levels The UK's commercial fleet is growing A backlog of ship orders has led to increased shipping volumes A growth in UK-flagged shipping is being supported by the UK government UK maritime revenues have performed well during the downturn The Marine Insurance Act will be re-enacted during Changes to UK regulation will be broadly positive for the sector An EU competition review may limit P&I reinsurance capabilities, further hardening the market Global political and environmental factors are impacting the UK marine market The melting of Arctic ice will give underwriters two untested shipping routes A drive for efficiency and reducing environmental impacts is changing vessels' risk profiles Renewable offshore energy has the potential for strong income increases Traditional offshore energy is valuable but is in long-term decline The world will look to the UK as the leader in renewable offshore energy and offshore insurance Offshore renewable energy is a relatively untested risk Offshore energy technology is evolving and will gradually reduce offshore hazards Offshore renewables offer a unique set of new risks Cargo insurance remains soft due primarily to a commoditized market Low cargo volumes and containerization have reduced differentiation in policy cover Containerization and commoditization mean cargo rates have remained stable An increased stockpiling of cargo is giving insurers an opportunity to increase cargo rates Increases in hydrocarbon imports are giving a means to differentiate cover Solvency II regulation is requiring cargo underwriters to price their reserves more accurately The hull and machinery sector continues to operate with soft rates Low CORs during have attracted competition to the market A hardening in the reinsurance market is not expected to have a material impact on hull rates The falling cost of repairing vessels has reduced pressure on claims expenses Large claims can impact the market heavily and have the potential to harden the market with one incident The average cost per claim for fires and explosions has increased sharply The P&I market has hardened slightly in response to global events The P&I market structure allows for a wide spread of liability risk Increases in P&I premiums have been minimal from 2010 onwards Pollution is leading to an adverse claims environment, pushing rates up Personal injuries and marine deaths continue to drive claims expenses Responses to piracy are requiring increased P&I cover The pleasure craft sector remains stable Pleasure craft account for more than 75% of UK inland craft Pleasure craft have limited penetration among UK consumers Low consumer confidence is limiting premium growth DISTRIBUTION DYNAMICS Brokers remain the most popular distribution method Brokers account for 80% of MAT premiums Brokers play an important role in placing pleasure craft cover Larger brokers are more likely to provide marine cover Brokers value low price and good cover when choosing marine insurers Aviva is the most popular broker choice for marine risks Pleasure craft brokers use local relationships to distribute marine insurance Brokers target pleasure craft and SME owners via online and press marketing COMPETITIVE DYNAMICS Berkshire Hathaway, ACE, and Torus saw strong growth during

3 Lancashire Holdings has rapidly increased its GWP RSA achieved a profitable COR supported by low administrative expenses Torus is expanding rapidly ACE has grown aggressively and will be looking for acquisition opportunities in The makeup of the top five insurers by line suggests that each product requires a distinct approach FUTURE DECODED The marine market will experience weak growth as the market remains soft Profitable CORs and a troubled underlying market will keep premiums from hardening Brokers expect marine premiums to remain stable during Offshore energy will have mixed fortunes over the next five years Cargo insurance will remain commoditized Hull and machinery premiums will be supported by a fall in claims costs P&I premiums will benefit from a return to growth but may be constrained by geopolitical events APPENDIX Sources Ask the analyst Disclaimer TABLES Table: Marine insurance breakdown by market ( 000s), Table: UK marine market performance ratios (%), Table: London market premium breakdown (%), Table: London market GWP breakdown ( 000s), Table: Number of UK-owned trading vessels over 500 gross tons by volume, Table: UK and crown dependency registered trading vessels over 500 gross tons (1,000 tons), Table: UK marine revenue by source ( m), Table: Estimated potential generating capacity, 2010 onwards (MW) Table: Global average claims cost by type of peril ( 000s), Table: UK marine deaths by vessel type, Table: Distribution of MAT insurance (%), Table: Brokers distributing marine insurance by premium income (%), Table: Brokers' top 10 choices for placing marine cover, Table: Marine insurance advertising spend ( ), 2011 Table: Marine GWP and market share by company, Table: Top 10 UK marine insurance groups' performance ratios (%), 2010 Table: Top five London market insurers by GWP ( 000s), 2010 Table: UK marine GWP forecasts, f Table: Key variables impacting the UK marine insurance market, f FIGURES Figure: Marine premiums have recovered to and passed pre-recession levels Figure: Profitable CORs are likely to attract competition Figure: Cross-trades account for the largest single proportion of the UK's marine revenue Figure: Most of the top 10 were able to increase market share Figure: Incremental GWP growth will be a result of low increases in shipping volumes Figure: Marine premiums have recovered to and passed pre-recession levels Figure: Profitable CORs are likely to attract competition Figure: Energy, cargo, and hull together account for 90% of London market premiums Figure: Energy premiums were hardest hit by the recession Figure: Growing shipping volumes have kept cargo costs low Figure: Container shipping has led to an increase in UK-flagged vessels Figure: Cross-trades account for the majority of the UK's marine revenue Figure: Maersk Triple E ships are part of a continuing trend for ever larger vessels Figure: The UK has the potential to lead offshore renewable growth Figure: A drop in shipping income is keeping cargo rates steady Figure: The cost of fire and explosion claims has increased from 2007 onwards Figure: A broad spread of risk allows P&I clubs to insure large risks Figure: Flooding and bad weather in 2007 caused a spike in marine deaths Figure: Private pleasure craft make up the majority of UK inland craft Figure: Brokers account for the majority of MAT GWP distribution Figure: Many smaller brokers do not distribute marine cover Figure: Price and level of cover determine where brokers place cover Figure: Brokers account for the majority of marine insurance spending Figure: Most of the top 10 were able to increase market share

4 Figure: Lancashire and RSA achieved profitable CORs Figure: WR Berkley's large loss ratio pushed its COR above 100% Figure: Incremental GWP growth will be a result of low increases in shipping volumes Figure: The largest proportion of brokers expect no change to premiums during Figure: Offshore energy premium growth is dependent on government support Figure: Cargo premiums are dependent on world trade Figure: The global recovery will be the main driver of hull premium increases Figure: P&I premiums will be challenged by political and economic conditions Ordering: Order Online - Order by Fax - using the form below Order by Post - print the order form below and send to Research and Markets, Guinness Centre, Taylors Lane, Dublin 8, Ireland.

5 Page 1 of 2 Fax Order Form To place an order via fax simply print this form, fill in the information below and fax the completed form to (from USA) or (from Rest of World). If you have any questions please visit Order Information Please verify that the product information is correct and select the format(s) you require. Product Name: UK Marine Insurance 2012 Web Address: Office Code: Product Formats Please select the product formats and quantity you require: SC Electronic (PDF) - Single User: Electronic (PDF) - Enterprisewide: Quantity USD 5250 USD Contact Information Please enter all the information below in BLOCK CAPITALS Title: Mr Mrs Dr Miss Ms Prof First Name: Last Name: Address: * Job Title: Organisation: Address: City: Postal / Zip Code: Country: Phone Number: Fax Number: * Please refrain from using free accounts when ordering (e.g. Yahoo, Hotmail, AOL)

6 Page 2 of 2 Payment Information Please indicate the payment method you would like to use by selecting the appropriate box. Pay by credit card: You will receive an with a link to a secure webpage to enter your credit card details. Pay by check: Please post the check, accompanied by this form, to: Research and Markets, Guinness Center, Taylors Lane, Dublin 8, Ireland. Pay by wire transfer: Please transfer funds to: Account number Sort code Swift code IBAN number Bank Address ULSBIE2D IE78ULSB Ulster Bank, Main Street, Blackrock, Co. Dublin, Ireland. If you have a Marketing Code please enter it below: Marketing Code: Please note that by ordering from Research and Markets you are agreeing to our Terms and Conditions at Please fax this form to: (646) or (646) From USA or From Rest of World