Continued overcapacity for most marine risks is causing soft market pricing and increased attention to new product development and differentiation, says Aon Risk Solutions in a report on the marine market issued Wednesday.
The second quarter summary and forecast by the Aon P.L.C. unit also discusses the various segments of the market. It reports for instance, that there is still abundant blue water hull & machinery underwriting capacity, which is preventing rate increases “for all but the most challenged loss records.” It states results continue to be unsatisfactory for insurers, and there is some softening of accounts with long-term favorable loss experiences.
In the protection & indemnity segment, several P&I clubs have reported an improvement in underwriting results, and P&I clubs are being more aggressive in seeking new business with good loss experience, which can ultimately benefit shipowners, according to the report.
Capacity for writing primary liability and brown water business remains strong, and rating remains competitive, says the report. “In addition to strong traditional U.S. market appetite for this business, there are several London and other offshore markets which have recently opened in the U.S. to underwrite this class of business,” says the report.
Cargo markets remain under pressure to grow, with accounts with good loss experience seeing reductions, especially when marketed—policyholders shopped for a different insurer, according to the report.