• 24 January 2019

With sectors of the North American domestic market tightening and underwriters becoming more selective, we thought that it would be helpful to provide you with a London market commentary by class of business. 

You will note that there are a wide range of positions from prices continuing to reduce (eg cyber, transactional risk & terrorism) through to very restricted capacity (yachts probably being the most extreme example) while in other areas capacity has increased and newer classes are being developed (eg reputational risk, sharing economy and active assailant).

London company underwriters are becoming more visible in their activity as their strategies evolve around distribution of their risk capital. This is proving very helpful and contributed to our strong income numbers and business wins in November and December.

This commentary was largely written in the first weeks of January and can only be considered as a snapshot in time as the various market sectors continue to evolve.

Our recommendation is to stay closely tuned in to your Miller specialists. There are many opportunities arising and we welcome dialogue on any aspects of market changes or specific accounts where you might want to consider options for your clients.


  • Lloyd’s underwriters are being more selective on risk acceptance in 2019.
  • Several syndicates withdrew from direct & facultative offerings during 2018.
  • In practice, this translates to the better quality risks that are differentiated with more detailed submissions obtaining underwriters’ attention and indications.
  • There is a requirement for increased broking in order to obtain best available terms at any given stage, be this for large all risks placements, standalone perils or deductible buy-downs.
  • Caribbean writings remain restricted, with aggregates only being deployed on risks perceived to present the best balance of risk versus reward.
  • The need for skilled advocacy is increasingly paramount for anything unusual or hard to place.

Preferred business: Greatly increased scrutiny and careful selection with information and story even more important in differentiating quality accounts.



  • Capacity is still rising on a global basis and therefore there is plenty of competition on accounts and so we do not expect to see a hardening of pricing.
  • Cyber losses continue to hit the market and we expect this to start to have an effect on underwriting appetite. The recent Marriot loss has led to at least one market non-renewing all accounts over USD1bn in revenues.
  • Coverage has expanded at a rapid pace over the last year and it could be that this is where we see underwriters starting to draw the line.
  • Growth outside of the US market is expected to continue a pace, with regulatory changes and recent losses driving new insureds to the market.
  • Sophistication around additional services is increasing.

Preferred Business: Within the above few caveats underwriters remain keen to see all industry types and differentiation is around speed of response, claims payment and auxiliary services offered.



The Lloyd’s Market review means:

  • Eight syndicates have ceased writing hull altogether.
  • Others are moving their existing hull book outside of the Lloyd’s platform.
  • Business plans and discipline are required to demonstrate how to change the fortunes of a non-profitable book.
  • General capacity reductions within the class to focus on profitable areas.

We are consequently seeing:

  • rate rises of 0% to 10% on clean business.
  • increased rate rises of 10% plus on less desirable business.
  • no ‘straight’ rate reductions.

Looking forward to the mid-term outlook, our expectations are:

  • the present modus operandi will continue, unless there is a marked increase in significant class or CAT losses.

Preferred business: Situation remains fluid and we encourage a case by case dialogue.



  • Windstorm and attritional losses had a dramatic impact on this sector.
  • The yacht-specific class as a whole has continued to undergo drastic changes with many markets pulling out of the class completely or adjusting their appetites. 
  • Markets continue to impose increases in both rates and deductibles as a starting point for any renewal, regardless of the vessel’s navigating pattern.
  • Alongside this, for those remaining markets with an appetite for windstorm affected areas, a keen focus remains on aggregation in windstorm exposed areas, requiring appropriate and robust windstorm plans, or excluding windstorm coverage absolutely.

Preferred business: Highly selective with brokers required to have a dexterous knowledge of changing markets and underwriter appetites. Our successes remain on vessels over USD1.25m with no value or territorial limitations. 


Accident & Health

  • US Medical and US Sports are the two areas being carefully reviewed by Lloyd’s syndicates due to a combination of large revenues and poor loss ratios.
  • Most syndicates remain in the classes, but are certainly looking to cull any non-profitable accounts to free up tightening capacity and enable more PA business to be written.
  • No real change in rates/terms & conditions in other areas of A&H.
  • A lot of talk about limiting overall commission levels on facilities for general Accident & Disability business, but no real sign of this happening as yet.

 Preferred business: Underwriter appetite is strong, with capacity being deployed on better performing business.



  • Flow of US business into London continues to grow.
  • There have been four syndicates that have withdrawn from writing Contingency business in the last six months. This is a large number for a relatively small class.
  • Contingency losses continue to be heavy with 2018 being hit by two major Lottery claims as well as numerous festival losses (especially US festivals).
  • Non-Appearance rating has been increasing, but not as much as expected due to a relatively quiet year in Non-Appearance claims.
  • We anticipate capacity to continue to reduce in Lloyds but the Company market may expand,
  • There will be many opportunities for London brokers who are agile and forward thinking.

Preferred business: Strong appetite but rating will continue to increase – most notably on festivals and non-appearance risks. 


Energy Liabilities

  • In general, there has been a limited reduction in overall energy liability capacity as a result of the Lloyd’s review process, but no noticeable impact yet seen on rates. The current rating environment is flat, with risk adjusted increases/reductions.
  •  In the US, certain lines, in particular around the midstream space for pipeline companies and contractors and wildfire exposed accounts, have continued to see significant loss activity. As a result, we have seen a wider withdrawal of capacity in these classes, along with an increase in required attachment points and rate rises.
  • Likewise, the continuing trend for increasing quantum of US auto liability claims has resulted in more scrutiny on accounts with large auto schedules – typically there are additional information requirements and many underwriters are looking at higher ‘minimum’ attachment points.
  • The international energy liability market remains well capitalized, but there has been a small reduction of available capacity towards the end of 2018, with several markets limiting their overall line sizes on placement or withdrawing from the market. This has resulted in a degree of market stabilization, with rating largely flat.


North American Casualty

  • There has been little underlying shift in carrier appetite, with a continuing increase in enquiries coming in to London as some sectors of the domestic market tighten.
  • As a result, the current rating environment is largely flat, with risk adjusted increases/reductions.
  • Certain lines remain challenging, especially around New York construction business and transportation accounts/accounts with large auto schedules due to the significant loss activity seen in these areas.

Preferred business: There remains significant appetite for construction liability business, and the London market has been keen to respond to the emerging risks presented by the sharing economy, which has been a growth area.


Kidnap & Ransom

  • The market remains highly competitive with no shortage of capacity and new entrants recently joining the market.
  • Differentiation lies in the experience, resources and expertise of the crisis response consultants retained by the insurers.
  • A significant area of underwriting focus remains cyber extortion and its subsequent business interruption – a narrowing of terms and conditions, and a reduction in limits continues to be part of underwriters’ response to the growing number of Ransomware attacks.

Preferred business: Growth areas are Active Assailant, either by way of an extension to the K&R or a standalone product, and products which address wider people and security related issues. Several markets have launched new products that seek to help companies with a wider range of security related incidents.

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Professional Risks

  • Underwriters are beginning to talk about the possibility of holding rate although this remains as just chat at this stage with no firm moves in that direction.
  • Competition on the existing book is beginning to ease slightly and underwriters are trying to pick and choose their areas to be competitive. 

Preferred business:

Within the following three distinct sectors Miller has multiple exclusive binders allowing us to access underwriters within the Lloyd’s market who will write these classes to no other brokers:

  • Architects/Engineers/Contractors/Design Build E&O
  • Manufacturers E&O
  • Standalone Sexual Abuse Liability 


Directors' and officers' liability and transactional risk


  • Capacity remains steady for public D&O despite increasing frequency and severity of securities claims. 
  • Difficult classes such as late stage biopharma and IPO’s still considered.
  • New OTC facility off to a strong start.
  • A-Side DIC wording remains market leading product.

Preferred business: As above.

 Transactional Risk

  • Reps and Warranties market continues to grow a pace as product acceptance continues to grow in the legal and PE communities.
  • Stable rate environment with market leading coverage.
  • London market focused on middle market transactions which are often outside the scope of local markets.

Preferred business: As above with voracious appetite.


Financial Institutions

  • Increasing take up from US agents using London bespoke solutions for harder to place risks.
  • Coverage and wordings broad form.
  • Markets are both flexible and service orientated.

Preferred business: As above.


Cargo and stock throughput

  • Capacity has flooded the Cargo Market in recent years and underwriters continued to write very aggressively, despite a deteriorating loss ratio.
  • Whilst the cargo market suffered from the hurricane and wildfire in 2017, last year brought numerous warehouse fires, with one in December estimated to be over USD 100 million.
  • In 2018, a number of smaller syndicates pulled out of writing cargo and other underperforming syndicates have remedial plans.
  • There are still over 50 Syndicates and Company markets writing cargo, which means there is still significant capacity.
  • Underwriters are pushing up rating on renewals as well as being far stricter on “minimum premiums” for any one risk. However, underwriters are willing to negotiate outright rate rises with improvements in other areas such as deductibles or terms.
  • As a result, we are seeing underwriters being more selective on risks and there is reduced appetite in number of areas such as temperature sensitive goods, primary standalone stock and retail stores.
  • There is much more focus on providing detailed COPE information on locations especially in respect of fire protection following the losses last year. We have also seen a big change in appetite regarding delegated authorities, with many brokers failing to renew lineslips.

Preferred business: Company markets becoming more active, with markets being more aggressive on new business coming into London and supporting existing long term clients.



  • The terrorism market continues to offer increasingly competitive rates, meaning often it is a matter of justifying why not to buy coverage.
  • With the face of terrorism changing and methodologies evolving, the market has continued to develop the wording to ensure that it does not preclude terrorism incidents e.g. drone, gun attacks.
  • In a similar vein, underwriters are also looking to offer coverage that it ensures that coverage is provided no matter: “Who has done”, “Why they have it done it”, or “How they have done it”. This has all been incorporated under the Active Assailant product coverage.

Preferred business: Appetite is stronger than ever with markets becoming more creative and efficient.