Cargo Update – The Lloyd’s of London Marine Cargo Market 2022/23

From the departure of 13 Insurers to the arrival of 10 new Cargo Underwriters trading in the London Cargo Market during 2021/2022, combined with the impending announcement of a new Cargo team, the current capacity of the London Cargo Market looks forward to 2023 with confidence, optimism, and an ever-evolving underwriting appetite.

Although Insurers are contending with world-wide inflationary pressures, especially within the oil and gas markets, and an increased uncertainty posed by the global supply chain, which is contributing to fluctuations in transit and storage values, the market remains buoyant.

The London Cargo market is continuing to see an increase in the demand for Stock coverage, particularly as a result of the current rating trend Insureds are faced with by their P&C Insurers in the US domestic market. A solution we are seeking to provide Insureds to assist with increased pressures applied by the US domestic market is to remove the stock from their property programme and procure
coverage via an innovative Stock-Throughput policy, or in some cases, a standalone Stock policy, with full CAT coverage provided. Stock-Throughput policies continue to lead the way in the current market environment, with coverage provided door to door, raw materials to finished products, and no gaps in coverage. The risk appetite for transit programmes remains broad, as well as the reigniting appetite for Stock only placements, a competitive All Risks solution for an Insured, with contingent transit exposure.

Post COVID-19, the application of modelling, RMS and ensuring rate adequacy is achieved, the London Market has refocussed its underwriting decisions based on technical and commercial considerations, with sustainable Underwriting being an underlying tone for the future.

The Lloyd’s market during the past 12 months, despite reinsurance costs rising, has generally moved from a “hardening” to a “stabilising” marketplace, with market wordings being tightened and reviewed for the best available coverage, and marine rating generally remaining flat, with increases applied where rating adequacy has not yet been achieved. One notable wording change that has been requested by Insurers for new opportunities and renewals is the inclusion of the War risk amendment Clause(s) being Five Powers Clause JC2023/024 and War and Strikes NOC Administration Clause JC2023-023; due
to the political and global economic uncertainty caused by the Russia/ Ukraine conflict, many insurers have requested the inclusion of the clauses and where applicable, have introduced coverage exclusions for transits to, from or within Russia, Ukraine and Belarus and associated areas e.g., Donetsk and Luhansk People’s regions.

With the market now adopting a “hybrid” approach, the key to a successful broker / market relationship in 2023 is service and creativity, designing and delivering an insurance programme which suits an Insured’s requirements in a timely manner. The use of online trading platforms continues to shape the future, but a combination of online trading and personal “face to face” conversations, with the Tysers Cargo team recently growing to 25 people, is vital and remains a key component of the Tysers philosophy.