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Monthly Archives

September 2020

Swiss Re outlines further market hardening

By Insurance, News

It’s fair to say that the coronavirus pandemic has had a massive impact on the reinsurance industry – but just how bad will things get? According to reinsurance giant Swiss Re, it appears that prices are only going to increase.

The firm has pointed to further market hardening, but outlined a positive outlook for renewals. It expects price increases across all segments to continue, pushed on by low interest rates, growing risks and large claims.

In a statement issued today, it outlined “rate improvements in many markets, and particularly in loss-affected segments” indicating further rate hardening across all lines of business. At the same time, a reliance on underwriting profits will increase in the low interest environment with Swiss Re suggesting there will be more opportunities for reinsurers thanks to increased insurance demand and growing exposures.

“Swiss Re expects prices to continue to increase driven by the combination of lower interest rates and the need for prices to cover increasing loss trends as demonstrated by recent experience across the world,” it stated.

In particular, it focused on hurricanes leading to severe losses, noting that the current Atlantic hurricane season is the first on record with nine tropical storms forming before August, with 13 before September. This is being further aggravated by a higher frequency of bushfires and floods, prompting rising claims.

“Even before the COVID-19 crisis, most major markets were operating at below-average profitability,” said Swiss Re CEO of reinsurance, Moses Ojeisekhoba. “To be able to address the growing need for insurance protection in a sustainable way, further price increases across all lines of business are clearly needed.”

Overall, Swiss Re suggests the non-life insurance market will continue its growth, driven largely by an expansion in exposure. It forecasts a global growth rate of 3.3% in real terms over 2021.


Market readies for P&I loss as oil tanker in Sri Lanka catches fire

By Insurance, News

The marine market is readying for another potential loss as the oil tanker MT New Diamond is still engulfed in flames off the coast of southern Sri Lanka — days after a fire broke out on board.

After a boiler explosion in the engine room, a fire broke out on board on September 3. The Sri Lanka Navy, Sri Lanka Air Force, Sri Lanka Ports Authority, the Indian Navy and the Indian Coast Guard have been working to extinguish the fire.

One crew member from the Philippines has died, while 22 remaining on board were rescued. The 270,000 metric tons of crude oil remain on the ship.

An official statement from the Sri Lankan Navy said however, that there is no risk of an oil spill. “Necessary steps are being taken to prevent the fire from spreading to those crude oil storage facilities.”

“Efforts are on to prevent the fire from spreading to the cargo oil. No information has been received of an oil spill yet. Firefighting continues,” the statement added.

Despite these assurances, the market is preparing for another

InsuranceAsia News (IAN) has reached out to market players for comment on the claims and loss adjusting side. Tanker fires are usually covered under traditional marine policies.

The fire is occurring only six weeks after the disastrous MV Wakashio oil spill off the coast of Mauritius. Shipowner Nagashiki Shipping holds cover from Japan P&I Club, who said they are making “internal estimates” on the claims cost and don’t have public figures to disclose yet.

For more on navigating marine risks and profitability, see here. 

MT New Diamond is a large, crude oil tanker built in 2000; it flies the Panama flag.