b'FOGHORNFOCUS: SHIPBUILDINGMarine Insurance Market Update and New Build ConsiderationsBy Jamie Smibert, Aon Commercial Risk SolutionsT he insurance world operates in a cyclical manner within London and competition remains strong particularly for capacity (availability of insurers) being one of the keynew business and accounts with minimal lossesshipyards factors that affects pricing. When interest rates areremain a competitive space and one that many markets are low, investment pours into the insurance market and ankeen to compete on. Over the past 12-18 months, a number abundance of capacity drives down pricingthis is knownof Lloyds syndicates have opened up operations in the U.S. as a soft market when insurers outstrip buyers. It has beenbut these insurers do not seem to be viewing risks from a a buyers market for many years, however, we are now in anLondon-centric approach and are underwriting to the tune of interesting period of transition.the current U.S. market cycle (relatively soft still). It is likely The marine market saw a temporary hardeningto be a matter of time before the hardening spreads to the following the 2017 Harvey, Irma and Maria hurricanes.U.S. and we see a tougher stance taken from U.S. insurers However, it wasnt until midway through 2018 that real this is already being seen on poorly performing accounts changes were seen in London when Lloyds of London tookwhere corrections to underpriced rating is being sought. an active step to control underwriting and exposure man-agement. Unprofitable syndicates were ordered to presentMarine Construction Markets remediation plans for their respective returns to profitabilityThe marine construction market, which shipyards fall in the near-term, with the threat of closure for those that failinto, has historically been a profitable class for underwriters to do so. The unprofitability, to a large extent, was resultinguntil three recent large market losses wiped out around ten from marine with three of the eight worst performing linesyears of Construction premiumthe Lursson yacht loss in in Lloyds being Marine - Hull, Cargo and Yachts. The U.S.Germany which was near to delivery following a four-year has not seen the same rate increases that are being demandedbuild project; a number of Fincantieri yard losses in Italy, and Photo courtesy of All American MarineData You Desire, At Your Fingertips Simplify Record Keeping & Invoicing Track Vessel Location Track, Report & Archive Compliance Datagplink.com| +1.252.504.5113Set up Geofences20 APRIL 2019FOGHORN'