Efforts by Lloyd’s to talk up marine rates in the London market is driving a wedge between syndicates in One Lime Street and their international competitors, according to JLT.
In its latest energy review newsletter, the broker said that threats leveled by Lloyd’s about loss-making marine lines – including hull, cargo and yacht – had spurred international players to undercut their peers in London.
“We now have a slightly confused and somewhat split marine market as London, and Lloyd’s in particular, continues to try to drive premium rates upward wherever possible,” the report said.
“However, with no such whip to the backs of the marine underwriters in the American, Scandinavian or Far Eastern markets they remain on the softer side of the line and as a result a clear differential is opening up between London prices and terms and its overseas competing markets,” the report went on.
The report said that with the gap widening, buyers can reap the “short term gains” by moving business to different markets or blending placements with a mix of worldwide capacity, where fleet size and exposure allow.
JLT said that while it expects overseas markets to eventually align with the rates set in the London market – as has historically been the case – there will be a time-delay before that happens.
“What London does today other less dominated markets eventually reciprocate, but it could take at least one renewal season for this to occur.”
JLT said brown-water and offshore fleets remain the exception to this rule, with these classes of business remaining attractive to all markets.
The broker also pointed to the marine liability market as remaining stable.