Hiscox Launches ‘Variable Consortium’ for Hard-to-Place U.S. General Liability Risks

July 6, 2020

Hiscox, the Bermuda-based specialist insurer, together with RKH Reinsurance Brokers, has launched a new variable consortium with a maximum line of over US$20 million for a range of challenging general liability risks such as wildfire, trucking and construction.

A market first, the variable consortium enables Hiscox to bind capacity on behalf of its follow market, while allowing every consortium member the opportunity to flex its line-up to a selected maximum on a risk-by-risk basis, rather than be tied to a predetermined share of all business.

The variable structure gives Hiscox and its consortium members the flexibility to respond to more challenging and specialist risks, offering brokers access to a meaningful amount of capacity from a single underwriting source, which increases the efficiency of the placement process.

The consortium is the third of a suite of U.S. liability consortia led by Hiscox, which said it has been put in place to respond to a shortage of capacity in harder-to-place areas of the excess and surplus lines market, which fall outside of the scope of their existing consortia.

Combining the capacity of six Lloyd’s syndicates, the variable consortium is open to large risks domiciled in the U.S. and has already bound US$1 million gross written premiums.

Ed Wallis, general liability line underwriter at Hiscox London Market, said some of the larger risks in highly exposed industries have been struggling to find capacity. “The variable consortium offers general liability brokers and their clients a valuable point of entry for London market capacity, and will bring risks into the Lloyd’s market that might otherwise struggle to find a home,” he said.

He said the consortium members want to consider a “broad spectrum of risks in capacity-challenged areas of the liability market, on the basis that they need not be constrained by a predetermined share of the portfolio,” Wallis said.

This allows the consortium members to vary their line according to the risks put in front of them, allowing aggregation of a larger amount of capacity than might otherwise be able available through a traditional consortium structure.

Tom Gauge, an executive director at RKH Reinsurance Brokers, said the consortium benefits include capacity, distribution and expense management, and can play an important role in “as the Lloyd’s market reassesses how risks can be placed most efficiently.”

Source: Hiscox

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