MS Amlin has significantly increased its capacity in the fixed premium protection and indemnity insurance market after spotting an opportunity for growth.
The company is now providing $500m in capacity through MS Amlin Insurance, compared with $100m last year. There is also $1bn of additional capacity sourced from Lloyd’s of London and other selected insurers.
Profitable performer
Tom Oostra, MS Amlin regional director for marine and aviation in Europe, said it has been a “long term ambition” to grow in the fixed premium P&I market, which has been a profitable performer.
He said that he believes scale, a strong team and capacity are the three requirements for a successful fixed premium offering.
Through the strength of its backer, the giant Japanese MS&AD Insurance Group, he said that MS Amlin is now in a position to add the required capacity.
“I think it is important to put your money where your mouth is,” he said of the MS&AD group’s decision to back MS Amlin’s ambitions in the fixed premium market.
I think it is important to put your money where your mouth is
Tom Oostra
He added that a reduction in managing general agent (MGA) activity in fixed premium is another positive working in favour of the market.
This year, RSA pulled capacity from fixed premium provider Lodestar, an MGA. Generally, fixed premium MGA’s have suffered funding difficulties due to problems at the Lloyd’s of London market.
P&I mutuals have also been on the acquisition trail in the fixed premium market. However, brokers believe there has been no reduction in capacity. Oostra admitted the capacity issue is still “challenging”.
However, he is optimistic there is growth potential in the market and he can build on MS Amlin’s estimated 12% market share.
Traditional providers
Brokers have said growing interest among P&I mutuals in the fixed market is a threat to traditional providers because of the reputation the clubs have for claims handling and payment.
Oostra believes MS Amlin can match, if not exceed, the mutuals’ claims handling capability.
In a separate development this week, Lodestar was scheduled to finalise fresh funding following the departure of RSA. However, it is understood the deal, reported to be with the Aspen Insurance Group, has been delayed.
