London-listed Lancashire Holdings has reported a significant rise in marine premiums, as it increases its exposure at a time when hardening rates are improving sentiment toward the sector.
The Bermuda-based insurer said that in the first six months of this year it had grown marine revenue by 17.8% to $53.5m.
That compares favourably to average growth of 15.3% across all of the insurer's business lines.
In its earnings statement, Lancashire said that the revenue boost came as a result of increasing exposure to the marine market, where it is seeking fresh growth.
Lancashire group chief executive Alex Maloney said: “The increase in marine gross premiums written was primarily due to rate and exposure increases across all lines of business, supported by new business growth in the marine cargo and the marine hull classes of business. The marine segment also benefited from exposure increases on policies bound in prior underwriting years.”
However, looking at its prior year loss developments, Lancashire Holdings said that for the first six months of 2020 it recorded a $14.5m loss in the marine sector, compared with a $7.2m surplus in the same period last year.
Lancashire said: “The unfavourable development during the first six months of 2020 was primarily driven by a number of late reported losses from the 2019 accident year, reserve deterioration on a couple of marine claims in the 2017 and 2019 accident years.”
Marine losses also hit diverse insurance company Hiscox. It did not disclose segmental figures for its marine division but said that its marine business offshoot Hiscox London Market had suffered “above average losses”, which included “a large individual marine liability loss”.
However, the insurer did not name the marine claim involved.
On a more positive note, Hiscox said the profit drive by the Lloyd’s of London market had pushed up its rates across its Hiscox London Market business lines by an average of 13%, which included a whopping 23% increase in cargo rates.
Hiscox said: “Renewed discipline in the market is combining with a global contraction of risk appetite to drive rates up.”
