Hull Insurance Market Update | November 2020

The commercial and private hull insurance market is experiencing a period of rapid change, both at a local and global level, as insurers seek to remediate portfolios that have consistency challenged profitability.

The reasons for this are varied, however, at its core are years of under-pricing by insurers which has recently been exacerbated by the onset of Covid-19. We are now seeing a rapid and severe reaction from insurers in the form of increased pricing, reduced risk appetite and restricted cover, and is some cases, withdrawal from the marine insurance market entirely.

Locally, at the start of this year Allianz announced the closure of their marine and transit division in New Zealand and Club Marine has just announced its exit from the New Zealand market after 30 years, which has come as a shock to many boaties. Globally, there have been 13 insurer withdrawals over the last 28 months.

In the Asia Pacific region, the pleasurecraft sector has been one of the hardest hit by the Covid-19 pandemic, with the number of enquires for yacht charters and second-hand yacht sales declining drastically in the first half of 2020. Further to this, many vessels are being laid-up for extended periods which will impact on premium income for insurers due to discounted lay-up rates.

Whilst this trend is likely to continue over the last months of 2020 and into the first half of 2021, it’s definitely not all doom and gloom. New Zealand is bucking the global trend and a record number of Kiwis are searching trade sites for a bargain on vessels and caravans as they seek a domestic holiday escape, rather than travelling overseas.

As an independent broker, Aon continues to have access to markets willing and able to provide marine and boat cover. With over 25 years of marine and boat insurance experience and extensive market knowledge we can find the best placement and most competitive terms for our clients. This also removes the need to navigate online offerings, which can be extensive and confusing.

Aon continue to sponsor Yachting New Zealand and have invested in a new, global lead for yacht business in London to focus on this class of business. This should have a positive impact on our global underwriting relationships and provide options in the future for exotic risks (superyachts, racing yachts and the like).

For more information, please talk to your local Aon broker today

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