Increasing demands for energy and bulk commodities, robust international tourism and development are boosting marine insurance in the Asia-Pacific region, with Singapore
serving as a regional hub for underwriting and new business.
Growing demand for liability insurance for small and special vessels "is a major imperative" for the expansion of underwriting teams and claims services in Singapore, according to mutual marine insurer Shipowners' Club, which offers property and indemnity insurance to vessels.
There is "tremendous growth through organic expansion as owners take delivery of new and sophisticated vessels," said Simon Swallow, commercial director of Shipowners Protection Ltd., a management company of Luxembourg-based Shipowners Mutual Protection and Indemnity Association.
"We've seen new companies starting up especially in the offshore sector," Swallow added. There is higher awareness of liability protection and the need for related products in the region.
"As demands for coal and other bulk commodities increase so will maritime activity in this sector," said Swallow. The tug and barge sector has developed in the region along with high demand for oil and coal. Tourism also has an impact, driven by robust international travel business, requiring wider liability protection.
The same demand for energy-related materials is also driving insurance for mining operations in the region, according to insurance brokers (Best's News Service, Aug. 1, 2011).
Regions such as Vietnam, eastern Malaysia and parts of Indonesia are more aware of insurance benefits as maritime authorities are setting certain compulsory insurance requirements. This shows the importance of sharing risks through mutual membership to maintain the quality of tonnage, Swallow noted.
Since the launch of its first Asian branch in Singapore in 2009, the marine insurer sees "a constantly growing membership and broker base," said Steve Randall, general manager of the Shipowners' Club in Singapore. The market has a need for new product development and simplification of existing cover.
The Singapore branch posted significant recent growth in business, with 586 individual members representing 5,500 vessels, said Swallow. All businesses in Singapore come from brokers which have high standard of capability in the region.
With branches in London, Vancouver and Singapore, Swallow said the club "has no plan at this stage for further development of overseas offices in Asia." The Singapore office is underwriting businesses for the Asia/Pacific region, including Australasia.
Singapore has many attractions as a regional insurance and reinsurance hub including a strong regulatory regime with high solvency and compliance levels, recognition of changes for the industry and supportive initiatives, a well-educated workforce and a high level of services, according to Swallow.
For marine and energy classes, this year's catastrophes in Japan, Australia and New Zealand has no real impact on the European market, although this has yet to be properly tested as larger clients' programs generally renew in January 2012, according to a report by reinsurance intermediary Guy Carpenter & Co.
International marine accounts can be competitive for renewals, with a large variation in pricing related to substantial capacity available and loss records of each individual account, according to intermediary Aon Benfield's 2011 reinsurance market outlook report.
"Competition is inevitable and it is something that we have always lived with," but it also helps for improvement in products and services, said Swallow. "The increasing challenge in our business is regulation and the need to work closely with regulatory authorities ensuring the quality of product offered, certainty of claims services and recovery backed by a strong and solvent insurer," he noted.
Source:A.M. Best Company, Inc.