An increasingly risky world means that underwriters at Lloyd’s need to be more innovative in their approach than ever. We take a look at some of the difficult or unusual risks that have been insured this year.
Lloyd’s market insurers are quick to identify trouble spots and then move to find a way of transferring the risks clients face. In response to the growing incidence of piracy off the coast of West Africa, Beazley launched a tailored piracy policy specifically for shipowners with vessels operating in the region. Hijackings, with vessels and crew held for ransom, have been a well-documented problem in the Indian Ocean for years. Recently the Gulf of Guinea has seen an uptick in activity. Since January 2012 to date, there have been over 60 recorded incidents of which 41 were hijackings and boardings. “Unlike the attacks by Somali pirates, who hold crews and vessels to ransom, pirate gangs operating in the Gulf of Guinea are usually targeting cargo theft and commonly there are no ransom demands made, ” says Michael Sharp, K&R underwriter at Beazley Group. “Standard piracy/K&R policies like those used in the Indian Ocean are [often?] not appropriate for this risk. What’s needed is a service product that covers the costs associated with a hijacking and cargo theft.”
The product combines cover for both the kidnapping of crew for ransom and the illegal seizure of the vessel for theft of cargo, along with a tailored risk assessment and comprehensive incident response service provided by Maritime Asset Security and Training (MAST) Ltd.
Terrorism in Asia
To protect businesses against the financial fall-out of a terrorist attack in Asia, a new terrorism insurance consortium, Xin, was launched by Lloyd’s syndicates in 2012. Amlin, Markel, Canopius and Argenta set up the Singapore-based consortium to provide an insurance policy that covers against the perils of terrorism, strikes, riots and civil commotion, offering protection up to a maximum of US$110 million capacity for a single risk. Satellites It’s not all bad news-related risks, though, and the Lloyd’s market is playing its part in helping the economies of developing countries to grow. Jersey based O3b Networks is building a new fiber-quality, satellite-based, global internet backbone for telecommunications operators and Internet service providers (ISP’s) in emerging markets. O3b Networks is going to launch 12 satellites over the next couple of years to deliver broadband services to the developing world. An insurance policy covering the 12 satellites was placed in the Lloyd’s market by Marsh this year.
However, perhaps the best good news story came from a Lloyd’s coverholder in the US. New Life Agency specialises in “assisted reproduction insurance” and provides insurance for fertility patients, intended parents, surrogates, egg donors and professionals in the assisted reproduction medical industry. Its Newborn Twins Insurance, launched in 2012, provides coverage for twins born to parents who do not qualify for US-based medical insurance as non-residents and the $50, 000 premium buys $1m worth of coverage.
(source: Lloyd’s of London)