Cargo movements generally have been hit hard by the global recession during the last 18 months. Many construction projects have been cut back or cancelled due to lack of finance. Cargo importers and exporters have seen reduced demand for their products, and, as a result, annual revenues are down from previous years, all of which is impacting premium income levels to the cargo market.
The London and global cargo markets, however, remain incredibly soft with ample capacity available. The result is that targeted accounts, such as companies in oil and gas, chemicals, and manufacturing, are being fiercely fought over, and many assureds are now put out to tender on an annual basis.
In London, there are at least three new Lloyd’s syndicates that are venturing into the cargo market this year providing yet further capacity to an already saturated market. European markets remain competitive providing yet further capacity where required.
The opportunities for the assured are, therefore, better than ever, but it is important not to focus on pricing levels alone. Specific cargoes and tailored policies require specialist underwriting knowledge along with known service levels.
It is more important than ever that brokers demonstrate professionalism when tailoring a policy.
The increased capacity allows greater opportunities for Lockton to place the following key coverages within the cargo market:
- Delegated "in-house" underwriting authority granted to Lockton’s Cargo and Logistics Department to improve service level to small-sized to medium-sized enquiries.
- Stock throughput coverage including incidental property exposure.
- Primary Stock and Excess Stock on a stand-alone basis.
- Operational Equipment Floater policies (onshore and offshore including subsea) including the Gulf of Mexico.
- Specialist Food and Beverage Program including rejection/extra expense coverage.
- War on Land/Terrorism coverage.
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Please contact your Lockton Representative for further information regarding any information contained in this
market update.
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