As reported by InsuranceAsia News, insurers and brokers are seeing some softening of the marine insurance market in Asia, following three years of fairly decent growth. However, few expect the sector to lapse back into the bad old days of over-capacity and weak profitability.
Candace Chan, Managing Director of Rare Earth Insurance Partner’s Hong Kong operations shares her perspective:
“Insurers in the region have tended to adopt a more prudent and conservative approach this year, aiming at the profitability of their books rather than meeting top lines only.
There has been some hardening of the hull market, for a number of reasons, including but not limited to the poor loss result, reduction of facultative hull capacities, and the continual difficulties of completing their hull treaties in the region”.
Despite this, though … “the price increase in Asia lags behind the European and US markets. In terms of marine cargo insurance, rates remain fairly flat in the region, with insurers struggling to push for an increase and clients continuing to insist on reductions”.
Mounting competitive pressure could put further pressure on rates.
… “Large or well-performing risks, such as commodity accounts with clean loss records, are in particular experiencing pricing decreases.
Competitive pressure in certain countries – Korea being an obvious example – has been particularly acute.
… Rate reductions of up to 5% for non-performing accounts in Korea have been fairly common”.
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