Marine Cargo: Turbulent Times Demand Specialist Brokers
Now more than ever, the value of a specialist broker will be essential in what is likely to remain a challenging market for cargo insurance, according to Maksure specialists.
The cargo market has seen a number of large warehouse fire, transit theft and weather losses in recent years and as a result, a growing number of Africa insurers and reinsurers are realigning their books, in the main refocusing on less complex business.
“We are seeing a steady increase in enquiries of cargo insurance from across various African markets. By partnering with a specialist broker like Maksure, customers can find the most cost effective ways to insure their risk with good rated securities from Europe and Lloyds,” according to Elizabeth Mpofu, a lead product specialist Maksure’s marine cargo & hull.
Solutions in Turbulent Times
Despite turbulent market conditions characterised by limited capacity and increasing claims trends, Maksure continues to find tailor made risk solutions for both existing and new clients. Maksure has continued to place large placements in excess of USD10m cost effectively for existing and new clients.
As one of the largest marine cargo & hull teams in Africa, Maksure has developed solid relationships with carriers, which put clients in a strong position. By working with clients to prepare submissions and present quality risk data, Maksure is able to design and negotiate tailor made solutions for clients with the regional and international markets, increasing the chances of attracting underwriter support and converting the business.
Large losses in early 2020 and the wider potential impact of Covid-19 will now most likely see continued upwards pressure on rates and terms and conditions.
“We are finding that the market is hardening and underwriters require more quality data to make their underwriting decisions. We are happy that our market knowledge and perseverance to find the best solution for our client makes us unique to be able to find the right insurer and reinsurers for our clients at the right terms and conditions,” added Elizabeth Mpofu.
July Renewal Update
The July 2020 renewals came at a time when Covid-19 pandemic was approaching pick in the southern African market. Most insurers, reinsurers and brokers were operating remotely which had an impact on the turnaround times for quotations and securing capacity. Further, the wider potential impact of Covid-19 in terms of increased number of cargo in transit theft claims had started to be felt by the underwriters. This had an upwards pressure on rates and terms and conditions.
“Recent renewals have seen primary stock throughput rates increase by around 7.5% – 15%, with even larger increases in the excess market, where capacity has halved in recent years as insurers have withdrawn or reduced capacity”, said Mr. Knight Mawere, Chief Operations Officer at Maksure Risk Solutions.
“We have already seen a clear demarcation emerge between the primary and excess markets for stock throughput in London. Capacity for primary risk is still readily available, but a reduction in market capacity continues to drive rate increases on excess stock placements,” he says.
Tightening terms and conditions
While price remains a key issue, underwriters have started to turn their attention to wordings, with a particular focus on theft and coronavirus exposures, says Mpofu.
An example of this is that insurers are beginning to limit theft cover and imposing aggregate limits and higher excess. These restrictions could reduce insurance recoveries for an insured that has inventory transported in multiple vessels. “Increasingly we see underwriters seek to reduce potential losses through tighter wordings, such as more restrictive perils and/or extra expenses cover for non-physical damage claims,” she says.
Marine cargo and hull remains an essential product for clients and Maksure’s experience continues to see business placed at the best available conditions and pricing. In today’s market, the knowledge and experience of a specialist broker is critical to a successful placement, according to Mpofu.
“We believe in working with our clients, taking a proactive, strategic and creative approach to placing their risks. The strength and depth of Maksure’s marine team has enabled us to successfully navigate some difficult market conditions over the past three years, and we continue to attract the support of underwriters and obtain the best outcome for our clients,” says Mawere.
For more information regarding our Marine, contact our specialist marine team at +27 11 805 0086 or email email@example.com.
About Risk Solutions
Maksure Risk Solutions is an Afro-Global independent specialist insurance and reinsurance broker with business footprint in Africa, Asia, East & Western Europe, South America and the Caribbean. We provide innovative and tailor-made risk solutions in Insurance and Reinsurance as well as Risk Financing and Actuarial Consulting geared towards capital management and strengthening our client’s balance sheet. Maksure is also one of the major players in Captive Management (Establishment & Management) in South Africa, Mauritius, Bermuda and various other jurisdictions. We have access into the Lloyds of London with a deep understanding of African markets. Our global nature ensures that our clients access quality capacity as well as some of the world’s latest thinking and solutions.