Aon has warned that UK marine cargo insurance will see some of the biggest increases in a hardening European market.
In its latest overview of the European sector, the insurance broker said the UK market, including the critical Lloyd’s of London and company marine markets, is “entering a more disciplined phase”.
It also highlighted the marine cargo market as “a particular area of concern”.
Aon estimated marine cargo premiums are increasing at more than 10% per year.
It said other UK marine liability lines, including hull and machinery, and protection and indemnity, are rising more moderately — “between 5% and 10%”.
The broker blamed the increases on heavy losses incurred through a series of natural disasters round the world.
“Insurance for directors and officers … marine cargo and professional liability are the business lines that are most impacted by the changing market,” it said.
Aon said if companies provide more information on their risk profile, they might be able to negotiate a better rate and would not be affected by the rising market.
As the market becomes more selective, buyers need to be proactive around the renewal process and improve the marketability of their risk profile
“As the market becomes more selective, buyers need to be proactive around the renewal process and improve the marketability of their risk profile,” said Richard Waterer, managing director for Europe, Middle East and Africa at Aon Global Risk Consulting.
“Businesses need to focus on developing stronger risk-management programmes, identifying areas where claims can be managed and reduced, and increasing collaboration between the insurance buying function and their broader enterprise risk-management team.”
However, the cargo insurance market is rising from a low base. It is generally viewed as one of the hardest-hit sectors in a soft marine market over the last decade.
The International Union of Marine Insurance estimates that gross global cargo premiums rose by 6% in 2017 to $16.1bn, although this has been attributed to higher volumes of business and exchange-rate fluctuations rather than increasing rates.