A look back at market conditions, rates and capacity during the 20/2 renewals.

Renewals and market conditions

As we moved past 1/1 and headed towards 20/2, the message from underwriters was largely unchanged, and at times appeared as if they were all reading from the same script. The recurring theme of years of under-pricing and a continuation of large marine market losses resulted in widespread belief that anything less than a 15% market rise would struggle to be completed. 

There was a distinct change in appetite from some reinsurers and a drive to increase attachment points for reinsurance placements, predominantly on charterers’ business, however this did also extend to the non-poolable elements of some programmes. Consequently, clients who were able to and chose to retain more risk generally experienced a smoother renewal process. The push for increased retentions is likely a result of an increased frequency of medium sized losses over the last few years (USD5m to USD15m). 

There remained a focus on excess layer pricing and following a move away from primary risks by some markets, there is now an increased requirement for excess layers to stand up on their own. At Miller, we understand each markets’ appetite and structure reinsurance programmes accordingly so that we can access all available capacity, utilising both London and international markets. 

The increasing requirement for actuarial input and senior management oversight meant that underwriter response times were often slow. Coupled with the lack of face-to-face contact, it was generally difficult to negotiate with a market once they had stated their initial position, though any timeframe difficulties were somewhat offset by the continued use of Placing Platform Limited (PPL) whereby multiple markets can bind concurrently. 


The market’s position on Cyber and Covid-19 were clear, with the Marine Cyber Endorsement LMA5403 and the Coronavirus Exclusion Clause LMA5395 being imposed on all placements. What was less certain in the run up to 20/2, was the availability and willingness of reinsurers to offer buy-backs for these exposures. It was only very late in the day that the vast majority of the markets agreed to offer a limited malicious cyber buy-back in respect of blue card liabilities. There are still a few markets who are unable to provide this cover, which led to challenges in completing placements.

Towards the end of Q1, the Joint Liability Committee (JLC) released a new Communicable Disease exclusion clause, JL 2021-014. The clause excludes coverage where the World Health Organisation has determined an outbreak of a Communicable Disease to be a Public Health Emergency of International Concern (PHEIC). There is no immediate impact upon reinsurance programmes arranged at 20/2, however it is likely that reinsurers will be looking to include the clause on new and renewal business incepting from 1/4 and signifies the direction of travel in the market. We fully understand the impact this will have on our clients’ business and will be working together with you to obtain the best coverage available. 

Read the Communicable Disease exclusion clause in full here >>



Throughout Q1, there has been a continuation of high profile marine incidents making both the insurance and mainstream news, particularly containership related losses. This has not only increased rating pressure in the market, but also amplified underwriters’ concern for this specific vessel type with a perceived increase in both frequency and severity of loss for container carriers. Over the last 18 months, the attention had been on mis-declared cargo and fire risks, though a number of incidents involving containers being lost overboard and most recently the grounding of the “Ever Given” has also highlighted non-fire risks associated with ultra large container carriers and the large costs potentially involved. 

Market capacity

As anticipated, the full “Class of 2020/21” marine liability reinsurers were not up and running for the 20/2 renewal season, and whilst there were a number of reinsurers looking to take advantage of the hard market conditions with increased stamp capacity, the retraction of Allied World syndicate meant capacity remained fairly stable.  

In addition to the new start-ups, ERS and Inigo, Lancashire Holdings have hired a senior marine liability underwriter as they look to grow within the class. 

Notwithstanding the loss of numerous markets over the last two years, capacity for large limit stretches is clearly still available; however access to this capacity has become far more price sensitive and requires a ‘clearing price’ in order for insurers to deploy maximum capacity.