Cargo & Stock Throughput

Strategies for softer times: our cargo market roundtable

Oliver Lombard 28 August 2025

Capacity is back, competition is fierce, and some once “off-limits” risks are now back in scope. But behind the rate reductions, a more complex picture is emerging. Oliver Lombard, our Cargo Practice Lead, is joined by three leading London cargo underwriters. Get the latest views, trends and opportunities from the market insiders.

1. How has your underwriting strategy changed with the softer cargo and stock throughput (STP) market in the last quarter?

Helen Steadman, AXIS: Our London Marine Cargo team has always had a broad appetite in terms of risk. With the market softening, we’re maintaining price adequacy and profitability, rather than becoming fixated on rate changes in isolation.

A critical focus for us is to maintain strong relationships and an open dialogue with clients . And, whenever possible, offer pricing options and flexible coverage solutions to deliver the most effective results.

James Hyett, Cincinnati: We’re in a slightly different position to most London cargo market underwriters, as we’ve only just started our marine portfolio. Our initial approach is to work closely with our broker partners to find the right balance – assessing each account’s price adequacy, terms, and conditions individually.

Michael Prendeville, Navium: We continue to focus on risk selection and rate adequacy. We’re choosing to concentrate on our own strategy instead of reacting to the market. We’re identifying accounts that we believe deserve rate reductions and holding the line on those that don’t.

This differential between accounts is nuanced and driven by multiple factors, including risk management, loss history and CAT profile. So understanding your client and their risks is as important as ever!

Oliver Lombard, Miller: At Miller, we’ve seen underwriters respond to the softening market with increased creativity, while largely maintaining underwriting discipline. There’s a noticeable shift towards collaboration. Underwriters are proactively reaching out to better understand our placements and see where they can add value.

I think part of this is due to market conditions, but also because we offer a strong alternative to network brokers. Our global network of independent intermediaries provides broader market access, helping underwriters reach clients they may not otherwise engage with.

2. What do you think is causing the softening in the cargo and STP market? Is it growth targets, new market entrants, better loss performance, or something else?

Michael: I think the remediation efforts that we discussed last year have been a key factor. As a result of this, capacity in the market has increased significantly over the past 18-24 months. New MGAs and syndicates are entering the market. And some syndicates that left at the start of the hard market cycle are coming back.

The reintroduction of broker auto-follow facilities has greatly impacted the softening market. A large share of both renewal and new business is now being placed that way.

Helen: I agree with Michael that the remediation work is a big driver. But it’s also been a period where loss activity has been relatively benign. That combination of pricing correction and underwriting discipline has made the cargo space increasingly attractive.

We’re seeing interest from existing players, new capacity providers, and domestic markets that had previously stepped back. And with that comes a rise in automated capacity deployment. This can displace incumbents and risk compressing lines to unsustainable levels. It’s a timely reminder that CAT events can quickly erode profitability.

James: Picking up on Michael and Helen’s points, there’s no single driver – it’s a combination. And they each impact parts of the market differently. For example, wholesale versus retail.

Increased capacity from new entrants (like us), domestic markets, or existing insurers in London is putting pressure on pricing for current placements.

Better performance, partly due to lower attrition and a calm CAT period, has also raised underwriter confidence. But a busy windstorm season or a lowering of deductibles could change profitability very quickly!

Oliver: From the broker’s side, I’d say all these factors are playing out at once.

Growth targets are pushing some carriers to be more competitive on pricing and terms, while new market entrants are increasing capacity and adding further pressure. Recent strong loss performance is boosting underwriters' confidence to invest more. This, in turn, increases competition.

3. How much is this being boosted by the softening in the property market, especially in London and domestic areas?

Helen: The property market has become more competitive again, and we’re seeing pricing challenges as carriers offer to cover stock at much lower rates. The property market cycles are usually more dramatic and frequent than cargo cycles, so we see this ebb and flow regularly.

James: I’d agree with Helen – there’s definitely been an impact. That said, clients who purchase STP policies for the first time do not necessarily transition back to the property market once they realise the benefits of the coverage.

Michael: The cargo market in London is now intertwined with both the cargo and property markets globally. This creates opportunities but also increases competition when capacity is abundant, further contributing to the softening environment.

Oliver: We are frequently competing with domestic property programmes and we are still seeing a good success rate even on accounts that have never previously had a STP policy. This environment lets brokers show the value of specialist solutions that the property market might not fully address.

4. What tips would you share with clients and local brokers placing business in the London Market to help them through the market downturn? How are you treating renewal clients compared to new business?

James: Currently, all business is new for us, but we do favour clients who have placed their policies in London for several years. We certainly saw during the hard market that longevity was the best method of managing the cycle. Long-term London Market clients get preferential treatment because of the relationship they’ve built with underwriters over time.

I’d encourage clients to syndicate their risk and work with a broad panel of underwriters. It’s one of the London Market’s key strengths, and something clients should be taking advantage of.

Michael: Differentiating your risk is essential. Underwriters can be more flexible than they were 12 months ago – with the right information, they can take a more tailored approach to pricing and coverage.

It’s true that long-term partnerships often lead to better terms and conditions. We’re more likely to be flexible with clients we have an existing relationship with. That being said, we’re keen to attract new business to the London Market, and will work with clients to find a solution that works for all parties.

Helen: I’d echo Michael and James. The benefit of long-term partnerships can’t be under-estimated. Renewals with long-standing partners are viewed more favourably than those with “frequent shoppers”. However, we treat every new business on its own merit – our usual pricing tools and modelling will always form the basis of our offer.

Oliver: I agree, partnership pays dividends. One example is when a long-term client in the London Market faced a multi-million dollar theft loss. Despite this, they only had a low single-digit increase at renewal. That comes back to the insurer’s confidence in the relationship.

However, we always help clients consider and explore alternative quotes too. That way, they balance the benefits of longevity but can still take advantage of improved offers elsewhere.

For new business, we’re seeing markets deploy capacity more aggressively to win accounts, which can create real opportunities to enhance coverage and pricing.

5. What other benefits are clients and brokers seeing in this soft market, besides lower premiums? Are you seeing more creativity in offerings, such as installation coverage or retail extensions?

Michael: Yes, installation coverage and retail extensions are common. But we mainly see them offered on renewals, rather than new business. For trusted clients, we’re also seeing two-year deals on the table.

Wording extensions help the London Market stand out from others worldwide. However, it's crucial that these extensions are underwritten with a clear grasp of the risks involved and priced appropriately.

Helen: The focus seems to be on pricing. Some markets offer enhanced coverage based on their appetite. However, this can reduce total capacity and cause coverage creep. So underwriters need to be cautious.

James: A softening market always brings a widening in terms and conditions. But I think London is being more proactive. Underwriters are focusing on creating targeted solutions instead of just broadly widening terms and conditions.

And, again, I would argue that underwriters are happier to consider more creative offerings as they’re more confident in their core portfolios.

Oliver: While many in the market focus on cutting rates, we’re taking a broader approach. We're actively reviewing and improving policy wordings for both new and renewal business. Our aim is to ensure that coverage breadth today reflects the latest market standards and opportunities, regardless of how long an account has been placed.

This includes negotiating on profit commissions, refining sub-limits (e.g. for expenses), and incorporating industry-specific clauses that add real value.

For example, we recently placed a STP policy for a grocery chain. It covered its entire international supply chain, plus in-store exposures, including full spoilage cover within retail outlets.

Select markets are boosting creativity, so it’s important for brokers to advocate for these improvements instead of just accepting lower rates.

6. As competition increases, have you seen a shift in appetite for “problem” classes like batteries, electronics, CAT-exposed stock or distressed accounts?

James: Yes, softer markets always increase appetite for problem interests. Partly because their terms have become more attractive post-hard market, and placement structures enable controlled participation. However, I’d say they generally remain more difficult to place, due to limited capacity.

Distressed accounts are slightly different. I think the London Market has always been open to them, and increased capacity will only put these accounts in a better position.

Michael: We’ve seen a measured shift. Some previously off-limit classes, like pre-launch, batteries or cars, are now in scope. Whilst market capacity for these more niche classes has grown, the ‘lead’ markets in these classes haven’t changed much.

Distressed accounts are also getting more consideration now, often via wording changes or annual aggregate deductibles (AADs).

There is still a focus on market discipline in CAT-exposed regions across the world. Global insured natural catastrophe losses in the first half of 2025 hit USD100bn, which is the second highest total ever recorded.

Even though the majority of these losses fell outside the cargo market, they’ll still put pressure on markets to maintain CAT rates due to reinsurance costs.

Helen: As the market is pressured to write income, higher priced segments can offer the allure of cash flow. They’re priced differently for a reason, and it will come down to individual appetite as to how much a carrier is willing to take on. At AXIS, we offer a tailored service, differentiating pricing, deductibles and line sizes according to the risk.

Oliver: We’ve never shied away from complex or challenging risks. It’s encouraging to see more of the market engaging with these types of opportunities.

As competition increases, we’re seeing more underwriters show appetite for classes such as batteries, electronics, and CAT-exposed stock – especially when risks are well-presented and supported by strong risk management.

This shift is creating valuable opportunities for clients with distressed or non-standard profiles who may have struggled to find viable solutions in the past. Our role is to navigate this evolving landscape, ensuring we match the right risks with the right markets.

7. What is your outlook for the cargo and property markets over the next 12–18 months? Do you expect continued softening, or are there signs of stabilisation or tightening in specific sectors or geographies?

Michael: Overall, we’re positive. Without large losses, softening will likely continue, though its extent will vary by interest, geography and risk quality.

We believe that the combination of increased competition and use of auto-follow facilities is going to bring further dislocation between ‘lead’ and ‘follow’ markets. This makes it crucial for underwriting teams to lead a significant portion of their portfolio.

Helen: The London cargo market is solid, but it may not yet have hit the bottom. In the absence of significant losses, we may continue to see increased competition on rates and a gradual expansion in coverage.

For new market players, this phase may feel strange, especially compared to the easier conditions before Decile 10. It’s important that we collectively maintain underwriting discipline to avoid the kind of sharp correction the London Market faced previously.

James: It’s tough to predict with so many outside factors. Still, I agree with the others – if the geopolitical and loss conditions stay stable, I think gradual softening will keep happening.

A lot will depend on 2026 business plans and any growth targets. I would expect that the uncertainty in the Middle East will continue to cause difficulties underwriting in that region.

Not my area of expertise, but I think for the property market a lot will depend on the 2025 and 2026 windstorm seasons.

Oliver: From the broker’s side, I expect continued softening in cargo over the next 12-24 months, with new entrants like Travelers and Sirius adding fresh capacity and competition. I’m confident the market will remain buyer-friendly through the next renewal cycle and likely beyond.

Thanks for reading. And special thanks goes to our market colleagues for their expert commentary.

Need help with your cargo placement? Or want to learn more about the benefits of STP insurance? Get in touch with Oliver and the team.