Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading Insurance Industry Is Incredibly Well Capitalized, Lloyd’s of London CEO says. This week we’re bringing you:
Who are the industry’s up-and-coming talents?*
Standing out amid a pool of immense talent can be a challenge, and, year after year, Insurance Business America makes it a point to recognize professionals who are rising above the pack, despite their young age.
Once again, IBA is on the look-out for individuals, aged 35 or younger, who are emerging leaders in their companies and are quickly rising to influential roles. If you know someone who fits the bill, take a few minutes to complete this short nomination form. Self-nominations are also accepted. Read more in-depth here.
Excess liability capacity shrinks as rates shoot up*
Buyers of excess liability and umbrella coverage faced the one-two punch of soaring rates and a capacity crunch at July 1 renewals, market sources say.
Some policyholders paid more for coverage and some bought less, while others were unable to achieve their past or desired levels of protection, they say.
In addition, insurers introduced more exclusions as they tried to limit their exposures, particularly for historic sexual abuse and molestation claims.
Commercial auto rates are also seeing rate hikes, after several years of increases, and primary general liability rates are rising but at a lower rate, sources say.
Excess and umbrella insurance markets have seen the exodus of some $500 million in capacity, said Anthony DeFelice, managing director, national casualty in New York for Aon PLC’s risk services division. The largest coverage tower achievable is roughly $500 million to $600 million in limits, down from about $1.2 billion last year, he said.
Policyholders that “buy the market” could previously have built $1.2 billion, but now can access only $600 million in total capacity, agreed Jon Drummond, New York-based head of casualty broking, North America, for Willis Towers Watson PLC. Read more in-depth here.
Newcomers see chance to step into insurance market amid pandemic*
(Reuters) — Commercial insurers are facing hefty claims from the coronavirus crisis but are also seeing a steep rise in premiums — tempting companies and industry veterans to raise capital, launch new businesses or expand into new lines.
New insurance ventures sprang up after Hurricane Andrew in 1992, the 9/11 attacks in 2001, and Hurricane Katrina in 2005. The industry is hoping to replicate that process as premiums increase because of the fallout from the pandemic.
Convex, a Bermuda and London-based insurer, for example, is launching cover for one of the areas worst hit by the current crisis — event cancellation.
Many firms are reducing the amounts of business they do in certain types of insurance, creating space for new entrants, said Convex Deputy Chief Executive Paul Brand.
John Cavanagh, former head of broker Willis Re and a founder of insurance venture capital firm Beat Capital, is seeking to raise funds in the “low hundreds of millions of pounds” from long-term investors for new insurance projects. Read more in-depth here.
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