Pantaenius: Capacity could be tested by hurricane season
The capacity of A rated yacht insurance could be tested if an Atlantic hurricane season similar to 2017’s was to happen again, Jane Smith, Pantaenius’ head of commercial partnerships told Superyacht Investor.
In 2018 there was a major reduction in capacity, as lots of insurance providers left the market. “Fortunately, there has not been a significant Atlantic hurricane season, since Harvey, Irma and Maria (HIM) in 2017, or there could have been a real danger of not enough A rated yacht capacity being available. Since 2018 there has been a stabilisation in the market, but it will be interesting to see what happens if there is a severe windstorm season or if there is a major loss on one of the larger yacht facilities.”
Although the market has stabilised, Smith told SYI certain segments are “cherry picking” the risks that they want to be competitive on. Indirectly this is having a negative impact on the remainder of vessels. Insurers have not been less willing to provide insurance in the past year, but some will be more impacted than others, said Smith.
As for the pandemic’s impact, Pantaenius initially saw a flurry of enquiries as owners looked to reduce costs, enquire about movement of crew and reduced staffing and policy renewals. “People shopping around to try and reduce costs, as the pandemic coincided with the end of the market reset, in terms of rate increases,” said Smith.
This has stabilised now, in all areas, and Pantaenius is seeing a “normal, healthy year” so far, albeit with some Covid-19 outbreaks on board yachts, which leads to protection and indemnity (P&I) claims and some changes to cruising itineraries.
Whilst travel has been restricted, getting the right people in the right place at the right time has been the biggest challenge – impacting crew, yachts and availability of surveyors for example.
Although the issue of players leaving the market has slowed for now, incidents like the grounding of the Evergiven in the Suez Canal could have a major impact on the yacht business.
“Directly there is no impact but indirectly there is, potentially, a major impact,” said Smith. “The Evergreen claim is one that will affect most insurers that participate on the International Group liability placement. If any of those insurers are then put under underwriting pressure it could effect their continued participation in certain sectors of the marine market. This may include yacht business.”
Subscribe to our free newsletter
For more opinions from Superyacht Investor, subscribe to our email newsletter.