Maritime Insurance

International insurers flock to Germany

AN increasing number of international marine insurers are interested in strengthening business ties with German owners by locating their underwriters in Germany. "We get a lot of requests from insurers who want to write business out of Germany," said Knut Remhof, head of the German branch of broker Marsh

The market is particularly important for foreign insurers. Germany has a large shipping community but there are only a few domestic insurers active in hull and machinery and even fewer in protection and indemnity. Alongside market leader Allianz, only domestic firms Wüba and HDI are able to act as insurers for high volume marine risks.

Most of the insurers interested in operating from Germany are part of Lloyd’s, according to Mr Remhof, though he does not divulge names. “There is a change in the market,” he said, with insurers seeking more direct contact to their customers. “They have recognised it makes sense to be on location in important markets such as Germany.”

International marine insurers write German business mainly through managing general agents who act like insurers and have underwriting authority but do not bear the risks. “The managing general agents become fewer, while the number of risks grows,” added Mr Remhof, pointing out that some German players are preparing to re-enter the hull and machinery market but insisting that there is no player who could lead an insurance programme.

Mr Remhof has identified a trend whereby Scandinavian insurers are pulling out of the German hull market. “Scandinavian insurers are no longer writing every risk but are looking for profitability,” he said.

Marsh Marine & Energy is looking to strengthen business with P&I clubs. While traditionally most owners have negotiated directly with clubs, they are increasingly seeking the support of brokers.

About 50% of P&I business is generated by direct contact but the role of brokers is increasing, according to Lars Rhodin, deputy managing director at The Swedish Club, who will succeed Frans Malmros in July. The Gothenburg-based mutual is active in Germany and generates 15%-20% of its business there. “The German market is international and very competitive,” said Mr Rhodin. “It is an interesting market with many owners having young fleets.”

He believes premiums for P&I cover will be up by a double-digit percentage figure next year again, at least for members of the International Group of P&I clubs. Last year, owners had to accept rises of more than 10%.

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