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CHART’S Client-Centric Approach Launches Programs And Products
CHART’S CLIENTCENTRIC APPROACH CAN LAUNCH NEW PROGRAMS & PRODUCTS IN THE U.S./LONDON MARKET PLACE
Glenn W. Clark, CPCU Publisher & Earliest Adopter
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Throughout its 334-year tenure, the London market has repeatedly demonstrated fresh approaches for dealing with emerging risk trends. Many of the products Lloyd’s pioneered are commonplace today. It is a worthwhile exercise to revisit some of these coverages in a historical context to fully appreciate just how innovative they were at the time.
PERSONAL LINES INSURANCE. The first gas-powered automobile was introduced to the world in 1886. The concept of a “horseless carriage” was slow to catch on; by the dawn of the twentieth century, there were only 4,192 vehicles produced in the United States (with 40% propelled by steam). In 1904 Lloyd’s was asked to insure a motorcar. Risk evaluation was handled by the market’s marine underwriters; it is hardly surprising that the insurance documents described the car as a “ship navigating on land.” Today there are over 203 million cars insured in the United State alone.
DIRECTORS & OFFICERS INSURANCE. The 1930’s was a time of significant economic upheaval in the United States. A number of regulations were put in place by the Securities and Exchange Commission to protect investors who were willing to buy public securities after the stock market crash. For the first time, directors and officers of the companies could be held personally liable for the decisions they were making.
Lloyd’s introduced an insurance policy to address this new exposure. It is widely believed that Federated Department Stores Inc (known now as Macy’s) was the first buyer of the coverage. Over the course of the last 85 years, Directors and Officers insurance has grown from a specialty offering to a commodity product purchased by practically every publicly traded company. It is estimated that about $15 billion of premiums are collected annually for the coverage.
AEROSPACE INSURANCE.
As any Trekkie can tell you, space is the final frontier. Yet it was up to Lloyd’s to boldly go where no man (or insurance carrier) has gone before. The first policy was written through the London market in 1965. It was written to cover physical damage during the pre-launch of Intelsat 1- the first commercial communications satellite to be placed in orbit. This was a milestone event in itself, as space vehicle enabled direct and nearly instantaneous contact between the United States and Europe via television, telephone, and fax transmissions. Over time, space has become increasingly commercialized. Insurance providers have kept pace by expanding coverage to include launch and in-orbit exposures. Lloyd’s continues to be a player in the aerospace-related marketplace.
CYBER LIABILITY INSURANCE. Cyber Liability covers financial losses that result from data breaches and other IT-related events. Most policies available today include coverage for both first-party and third-party exposures. One of the first policies to cover this exposure was issued through Lloyd’s in 2000. Recent reports issued by the NAIC indicate that the cybersecurity insurance market is generating upwards of $2.03 billion in direct written premiums. Lloyd’s of London has been an insurance leader for over three centuries. We’ve demonstrated how the market’s innovative approach to risk evaluation has had a real impact on the course of our entire industry. The CHART Exchange can serve as a resource for helping specialist insurance agencies launch new programs or products within the U.S./London marketplace. CHART’s client-centric approach puts us in the position to advocate for the business submissions seeking placement through Lloyd’s. We have a few tools at our disposal, including brokerage capabilities, and an extensive vendor network representing various disciplines.
For more information, view the CHART website (www.chart-exchange.com) or submit any questions to info@chartexchange.com.
