Marine Insurance to Become Uneconomic?
From: IHS Maritime 360
The anticipated cost of capital under new regulations could potentially make certain classes of marine insurance uneconomical to transact.
Patrizia Kern, chair of the facts & figures committee of the International Union of Marine Insurance (IUMI), said the new Solvency II regime that will regulate European Union insurers from 1 January 2016 will have an impact on underwriters.
“Solvency II will likely extend beyond the European Union and to other countries such as the United States,” she said at a press conference in London. “It brings with it higher capital requirements for underwriters and will see greater capital management and cost.
“Marine risks demand a high level of capital under Solvency II, and at present marine capacity remains abundant as new capital enters the market, and that overcapacity is expected to persist,” she said. “However these new costs have the potential to make certain marine risks uneconomic to write.”