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MARINE | Yacht Insurance In association with MS Amlin
Smooth sailing: A new approach to risk management for Superyachts
Matt Halpin, Lead Class Underwriter – Yacht at MS Amlin, says that success in the booming yacht and superyacht market has to be based on good risk management and better sharing of data for the benefit of all Staying afloat in the yacht market has been no mean feat for insurers in recent years. However, with the global yacht insurance premium per annum currently sitting at around $500-600m, it remains a class of significant opportunity. As with any challenging market, it is important to remain focused on underwriting discipline with rates, but it is just as critical that we implement practical and holistic services for our clients. While many people associate yachts, and indeed superyachts, with glamorous designs, vessels of jaw-dropping size and cutting-edge architecture, world-class safety is a fundamental requirement which we in the insurance market can vouch for. At Lead Yacht, we have honed in on the delivery of this key ingredient, offering a new and differentiated approach to risk management. Partnerships with other market players have been integral to the success of this service and we see such collaboration as a crucial pathway to the growth and development of the market more broadly.
A BUOYANT MARKET
Since Lead Yacht was founded in 1995 as the world’s first superyacht MGA, the market landscape has shifted dramatically. The Marine Insurer | March 2022
A period of challenging results between 2015 and 2017 left the market navigating choppy waters because of a variety of factors, including significant hurricane losses. Equally as important was the softening of the market in all areas. With more than $1.5bn of capacity available, the market severely suffered from over-saturation, leading to premiums at all-time lows. The level of coverage provided widened, resulting in lower-valued vessels being given the same coverage as much higher-valued vessels. Deductibles were also at unsustainable levels. In the last few years the class has undergone significant positive remediation and correction in rating levels. We are now seeing a light at the end of the tunnel and the consensus is that the London market should stabilise in the next year or two. As the market finds itself back on an even footing, growth opportunities are simultaneously increasing. Last year was the strongest year on record for the yacht market in terms of transactions and total money spent. One of the main drivers for the increased demand for yachts is the sustained creation of wealth, with the number of billionaires rising sharply during the pandemic. We have also seen the impact of low interest rates providing access to cheap capital, and an ever-growing demand for the privacy and private isolation that yachts, and to an even greater degree Superyachts, can deliver.
SAFETY FIRST
At Lead Yacht, we write approximately 50% of the world’s 100 largest superyachts by length. In our 25 years of experience, we continue to see accidents occurring despite
