Lloyd’s has released the results of a survey, which shows that the demand for specialist insurance cover is expected to rise significantly over the next two years as a direct result of European weather and liability exposures.
Lloyd’s conducted the survey during its inaugural European Symposium. It found that over 50 percent of insurance professionals “believe that natural and weather-related catastrophes present a significant challenge for the European industry in the short to medium-term, and 48% believe that spiraling litigation costs present a major challenge.”
Lloyd’s sees the trends affecting the insurance industry in two ways. “Firstly, demand for specialist insurance cover is expected to rise, with 50% of brokers expecting demand for property catastrophe cover to grow, and some 85% anticipating a significant increase in demand for professional liability insurance over the next two years.”
Lloyd’s Chairman Lord Levene commented: “By 2050, the UN predicts that losses will be 900 per cent higher than they are today [citing a report from the Environmental news Network]. In addition, we are seeing a clear shift in responsibility for third party losses away from the public to the private sector. These trends are increasingly presenting companies and the commercial insurance markets with greater, and sometimes less familiar, exposures.”
The second effect on the market will come from the rising cost of claims in these two areas. This “means that the importance of maintaining underwriting discipline within the European market is critical,” said the bulletin. “47% of survey respondents agree that a lack of underwriting discipline during the next two years could create significant problems for the industry in trying to respond to these challenges.”
Levene added, “The industry must focus on profitability. The scale of underwriting losses has been too great for too long. And we must remember, repeating it as a mantra if necessary, that we must stick to our core strengths and focus on our core expertise, whether we are underwriters or intermediaries.”
The full survey results are available on Lloyd’s Website at: www.lloyds.com/index.asp
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