BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
LONDON -- The Institute of London Underwriters, whose member companies underwrite about half the marine and aviation business transacted in the London market, warned last week that the competitiveness of the global market has reached the point where some underwriters could go out of business.
ILU Chairman Steve Redmond said global marine underwriters, whose accounts include marine hull, aircraft, liability, cargo and energy, were unlikely to manage an underwriting profit in 1998.
He was commenting as the ILU issued figures for the first six months of 1998. These show that ILU member companies received premiums, excluding excess of loss, of L143.2 million ($242.1 million) against claims paid of L7.8 million ($13.2 million), producing a loss ratio of 5.4%. However, total premiums received over the same period, including hull, cargo, aviation and excess-of-loss business, were L622 million ($1.05 billion) against claims of L758 million ($1.28 billion), producing a loss ratio of 122%.
Mr. Redmond emphasized that a full-year projection based on this year's first-half figures could be misleading as the majority of business is done in the second half. He said that, over the longer term, the figures show an alarming trend of rates falling by a greater rate than claims. Between 1995 and 1997, the loss ratio of ILU member companies deteriorated to 153% from 133%.
"The level of reductions underwriters are giving may well be their downfall at some stage in the future," warned Mr. Redmond.
He added that while the figures apply to ILU members, he has no doubt they are typical of the global marine market situation. "Without question, I would be surprised if the majority of marine underwriters make a technical underwriting profit on their 1998 account," he said.
One favorable item of news for London marine underwriters is that they appear to have escaped relatively lightly from claims from Hurricane Georges, which recently struck the Caribbean and Southeastern United States. Speaking for the London market, Mr. Redmond said, "There doesn't seem to be a huge amount of marine casualties at the moment."
Len Messenger, ILU spokesman on energy and an energy underwriter for Zurich Reinsurance (London) Ltd., said the same was true of damage to U.S. offshore oil installations.
"As far as I can ascertain, the offshore market got off reasonably lightly, with no reports of anything major," he said.