Lloyd’s Sees Growing Demand for Yacht Coverage

An article on the Lloyd’s Web site (www.lloyds.com) notes that “boat ownership continues to grow at a time when insurers are considering the areas around the world where they are willing to cover yachts and pleasure craft.”

Even with an increasing number of boats, rates have so far remained stable. However, as marketing and business development manager for specialist insurer Haven Knox-Johnston, Paul Birch, explained, “while last year’s U.S. hurricane season has not impacted on the cost of cover, it is now making some underwriters think again about the Caribbean.”

Birch indicated that he hasn’t seen an increase in rates due to the U.S. hurricanes. However, he noted, “there are those in the market who are looking at whether they reduce their exposure to insuring vessels in the Caribbean or withdraw from offering cover at all for the area. We are fundamentally a UK underwriter with some European covers and as such have not been affected.”

The bulletin notes that Haven Knox-Johnson is part of the Amlin Group and underwrites its risks via Amlin Syndicate 2001, Lloyd’s largest syndicate. Birch said the market remained positive with those banks that specialize in financing boat purchases all reporting increased business for the past 12 months. He added that following the events of Sept. 11, 2001 brokers and owners were continuing to seek assurances as to the financial strength of their insurance partners.

“It has become noticeable that since 2001 we have seen brokers and their clients seeking assurances that if there is a major incident you have the financial strength to continue,” he explained. “I think that is where having the financial strength and security of Lloyd’s and our parent group has stood us in good stead. The policyholders are looking for a financially strong insurer.”

Birch’s comments were made “as boat enthusiasts headed to London’s Docklands for the 2006 London Boat Show, to be held until Jan. 15, with over 800 different types of vessels both inside and outside the giant ExCel Arena,” said the bulletin. “The most expensive boat at the show is the 105ft [32 meters] Sunseeker 105 which will cost prospective buyers a cool £5.9 million ($10.4 million), depending on engines and specifications.” As J.P. Morgan is said to have remarked, “if you ask how much a yacht costs, you can’t afford it.”

Topics Excess Surplus Lloyd's