Insurance broker Miller is predicting rates in the marine liability market will remain hard as underwriters continue to push for more premium.
Following the 1 January renewals and the upcoming protection and indemnity reinsurance renewals, Miller said in a report that underwriters have "persisted with messaging their belief that fundamentally there is not enough premium in the system to pay for claims".
A series of costly high-profile casualties, particularly in the car carrier and container ship markets, has hit the marine liability reinsurance market. Underwriters are concerned about rising claims costs.
Miller said the overall view in the marine liability market is that "claim values are becoming larger".
The high cost of casualties has meant insurance layers above $50m will see the higher premium levels, it predicted.
The marine liability market's performance has also been under close scrutiny by management at the Lloyd's of London market.
Over the past few years, Lloyd's management has pressured syndicates to improve the performance of their marine liability business, which has led to a significant reduction in capacity.
However, there is no indication that Lloyd's will let up on the pressure on underperforming sectors. Miller said comments by Lloyd's chief of markets Patrick Tiernan indicate that he "expects recent pricing trends to continue".
Recent improvements in rates have encouraged new capacity to enter the marine liability market in 2021, including companies such as IQUW, Inigo and Navium.
Inigo has said it is looking to double its gross written premium this year and, following approval of its 2022 business plan by Lloyd's, has been given the go-ahead to underwrite a controlled premium of $850m in 2022.
Despite the growth ambitions of newcomers, Miller said they are not showing signs of disrupting the market. It said new capacity is being cautious about taking leadership positions and is tending to follow market pricing trends.
"This is mostly because of the shared belief that the marine liability market is still in need of pricing correction," it added.
