| Trend | Range | |
|---|---|---|
| U.S. market | ||
| Transit - Good loss experience |  |
+2.5% to +7.5% |
| Transit - Marginal to poor loss experience | |
+15% and higher |
| Stock throughput - Good loss experience | |
+5% to 10% |
| Stock throughput - Marginal to poor loss experience | |
+15% and higher |
| London market | ||
| Transit and stock throughput - Good loss experience |  |
Flat to +5% |
| Transit and stock throughput - Marginal to poor loss experience | |
+10% and higher |
Key takeaway
The hard market continues; however, renewed competition and enhanced growth targets in the marketplace have moderated upward rate movement in 2022. While rate increases are to be anticipated for incumbent renewals, reductions may be achievable in rare cases following a strategic marketing effort.
Underwriting discipline persists. Insurers remain focused on bottom-line profitability, with continued scrutiny of insuring terms and conditions and capacity deployed.
- Rate movement has stabilized for accounts with favorable to moderate loss experience.
- Insureds can anticipate a more predictable approach from cargo insurers at renewal. The hard market cycle has inched premiums closer to technical pricing requirements, while also pressuring deductibles upward and tightening coverage terms. These actions have had a positive impact on underwriting results, which lessens the need for drastic remediating action at subsequent renewals.
- Rate remediation has created an attractive entry point for new and revitalized cargo underwriting operations.
- Certain business segments and exposures are subject to more scrutiny than others, such as temperature sensitive products, pharma, automobiles and high-hazard cat exposures.
- Detailed exposure information and risk differentiation remain crucial to securing favorable terms and conditions.
- Analytical tools should be employed when available to best position insuring structures (with a focus on retention, cat limits, aggregates, etc.).
Vulnerabilities throughout the supply chain have become apparent during COVID-19 pandemic.
- Maritime mishaps, such as vessel fires, engine failures and containers overboard, continue to plague cargo insurers, adding to an already stressed global supply chain.
- A global shortage of available vessels and containers has contributed to an accumulation of values throughout the supply chain. We recommend insureds regularly review the adequacy of policy limits to ensure larger consolidations are accounted for.
- Vessel accumulation has led to a substantial increase in full containers shipped on a single sailing, leading to several incidents of containers lost overboard.
- The introduction of autonomous vessels will create new challenges for clients and insurers and require innovative solutions to manage new risks.
- Geopolitical instability causes uncertainty when certain trade lanes are used.
- Cyber events remain a looming threat to maritime trade.
Cargo and stock throughput markets are challenged by catastrophic losses.
- Large industry losses have occurred as a result of mis-declared cargo, causing concern for insureds and insurers. In some cases, shipowners have declared general average.
- Cat management continues concern insurers as they seek to increase deductibles and reduce cat limits deployed. Additional attention is being paid to cat definitions, especially regarding occurrence definitions and “fire following” buy-backs. In addition, insurers continue to seek the inclusion of straight-line wind in the windstorm definition.
