The chairman of the London insurance market’s Joint Hull Committee has been a leading figure in cautioning underwriters that heads would roll if the chronic unprofitability of the market was not addressed.
Peter Townsend warned in TradeWinds towards the end of last year that hull underwriters were “on the deck of the Titanic listening to the band”, and jobs would go if rating continued at unsustainable levels.
This week his warning came home to roost, with Townsend and his team out of a job as AmTrust decided to withdraw from marine.
The irony was not lost on Townsend, who was head of marine underwriting for AmTrust’s syndicate 1206.
But the 60-year-old was unrepentant this week that he had put his head above the parapet and told it as it was.
Townsend said he had kept to his resolve to write business at sustainable rates and had declined to renew 30% of the portfolio where terms could not be agreed.
“When you’re in a position where you represent the market there’s an onus on you to try to do the right things. And that’s what I tried to do. You can’t stand on a soap box and say we’ve got to get rates up and not do it yourself,” he observed.
“If you ask brokers. I think they will say we were among the toughest in the market. But we’re one of the first out.”
Respected team
The AmTrust marine team includes several well-regarded hull, cargo and liability underwriters, including Lee Bright, Ed Gregory, Marc Alcott and Stella Tomlin.
There are precedents for chairmen of the Joint Hull Committee finding themselves out of a job, as happened to a number in this position in the 1990s. But Townsend said AmTrust’s withdrawal from marine had still come as a “bit of a shock”.
Townsend said he has no thought of retiring and remains “fired up about unfinished business”.
This includes an ambitious project to launch a new insurance product that provides $500m of cover to avoid the need for containership owners to declare general average.
Townsend’s Landmark Consortium is ready to launch the product but needs an awakening of interest from liner shipping companies.
“When the lines are ready to go so are we,” he told TradeWinds.
Nasdaq-listed AmTrust is being taken private by its controlling Karfunkel-Zyskind family in a $2.9bn deal, after they won a battle with activist investor Carl Icahn.
AmTrust has also moved to consolidate its syndicates at Lloyd’s into a single entity.
It is not clear if these changes or the general state of the market was the trigger for the withdrawal from marine.
New York-based, Hungarian- born brothers George and Michael Karfunkel, founded AmTrust in 1998. The group’s chief executive, Barry Zyskind, is Michael’s son in law.
