LatAm and an evolving marine market
In recent years the marine market in Latin America has largely remained quiet, but this is about to change, as Gert van Middelkoop and Efraín Ignacio Sorá of Navigators, explain to FIDES Today.
What are the main dynamics in the Latin American markets at the moment?
We’re seeing two major influences on the market. The first is an influx of organisations with underwriting capacity seeking to establish themselves as providers to this market and their clients. This has had the short-term effect of suppressing rates.
The second dynamic we are just starting to experience is the effect of the recent hurricanes and earthquakes. At a minimum, we would expect to see the decline in renewal rates in Latin America reaching the bottom, and rate increases becoming a topic of conversation. To counter this, brokers are starting to produce more and more information, which helps the underwriting process.
What are brokers’ priorities when selecting a reinsurance carrier in the current market environment?
More than ever, reinsurance brokers want an underwriting partner that understands the local market, including the differences between one country and the next, a partner that can give guidance around proper risk management. Brokers appreciate it when an underwriter can help to identify and write the coverage that best suits each of its clients, as opposed to one-size-fits-all/off-the-shelf coverage for every account.
What are the main challenges for the Latin American market?
The main challenge is the uncertainty caused by the multiple recent natural disasters. Insurers do not know what effect these events will have on reinsurance costs, so brokers are therefore struggling to advise their clients on year-end renewal tactics.
These dynamics could mean that insureds, for the first time in many years, may well not find the best terms from changing re/insurers. Often in times of uncertainty staying close to the incumbent re/insurers that know you best can yield the best results.
Where do you see the main opportunities for growth?
As Latin American clients continue to evolve their risk management strategies, the need for more specific insurance products becomes more apparent. Some of these risks require in-depth knowledge of complex contractual relationships to be able to assess and price them fairly. Marine insurance is one such example, which appears to be in ever-increasing demand. The other opportunity for growth we see is a move to keep insurance purchasing, where possible, within the region.
What trends are you seeing in the global marine marketplace?
We are seeing a strengthening of the regional hubs such as Miami for Latin America, and Hong Kong/Singapore for Asia. The capabilities of these regional hubs have been strengthening rapidly in recent years, and are now staffed by experts who understand the region and the market.
These teams are now able to improve communication with the client, shorten turnaround times and reduce intermediary costs. The hubs are able to manage the majority of needs of their respective regions—it’s only the very largest and complex risks that are finding their way into the traditional markets such as London.
About Navigators
Navigators is an international specialty insurer and reinsurer focused on meeting the risk transfer and insurance coverage needs of businesses in specific industries for which the quality of our intellectual capital—in both underwriting and claims—provides a meaningful competitive advantage. Navigators’ marine professionals have been in the industry for many years and are empowered with meaningful authority to make decisions quickly in the local markets in which they operate.
Gert van Middelkoop is head of international marine at Navigators. He can be contacted at: gvanmiddelkoop@navg.com
Efraín Ignacio Sorá is marine manager, Latin America and the Caribbean, at Navigators. He can be contacted at: esora@navg.com
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