Underwriters insuring inland craft, fishing vessels and yachts report a general market soundness, with all but a few exceptions, after a tumultuous decade. But as always, facing unexpected weather, economic and political uncertainty – and developing – technology will challenge underwriting principles and performance.
This was the conundrum being debated at this year’s International Union of Marine Insurance (IUMI) annual conference in Singapore today.
Chairing the Inland Hull, Fishing Vessel and Yachts (IFY) Workshop, Rick Salway, Chair of IUMI’s IFY Committee said:
“Underwriting organisations have worked hard to reposition the market in its return to stability. Naturally and expectedly, these results will attract market capacity. What is perhaps more of a concern however is the exposure to things we do not expect, such as weather beyond hurricanes, an unstable political climate and economic uncertainty. Added to this is the increasing delivery of evolved products – different technology presents different risks. As market leaders, we need more and more to anticipate the unexpected.”
Aging inland hull and fishing vessel fleets continue to be a concern. Investment in existing fleets is not uniform and underwriters are increasingly dependent on inspections and maintenance records as they evaluate their risk portfolio. Adding to the challenge is a limited supply of qualified surveyors able to address underwriters’ concerns in a far reaching, global fleet.
Salway added:
“Given increased values and loss costs, insurers need to look more closely at variables such as costs of parts, labour and yard periods driving loss costs unique to our business that continue to exceed local inflationary costs.”
The yacht fleet is seeing investment in local infrastructure, often with the cooperation of local governments, to attract these vessels and their owners. However, proper valuations remain tricky and exposure to perils such as lightning and the increasing presence of lithium batteries on board. There remains transfer of risk issues from shipyards and management firms that are increasing as the fleet grows globally.
Summing up, Rick Salway said:
“It’s been a bumpy road to market soundness. We are nearing or at a crossroads and the path we take will determine the future health of each organisation participating in these classes.”
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