As you may have seen from the insurance press or from various broker/insurer reporting, Global Specialty Insurer MS Amlin will withdraw from underwriting UK motor trade business with effect from 1st January 2019. Their previous strategy of withdrawing from the sub £10,000 net premium market has not achieved the profitability corrections needed, and their combined operating ratios in this space are still pointing to an underwriting loss.
Therefore, from 1st January 2019 MS Amlin will withdraw from all open market motor trade business in the UK.
This means that:
- No renewals will be invited from 1st January 2019. There will be no extensions granted.
- Renewals invited up to and including 31st December will be honoured. However, significant increases will apply and these risks will need to be replaced in 2019.
- New business quotes already given will continue to be valid for the usual 30 days.
- No further new business quotes will be given with immediate effect.
- Where MS Amlin offer capacity to a select number of motor trade schemes in the niche areas they will continue to honour these arrangements.
So why are MS Amlin exiting this area of the market? In recent years, additional capital has entered the insurance market from a variety of sources where investors seek to find a better rate of investment return than available on bonds and traditional platforms. This investment and abundance of capacity has driven down the reinsurance rates and in turn provided an abundance of capacity, which has caused falling or sustained low insurance premiums.
Many underwriters have therefore broadened their underwriting appetite and started writing new classes of business, which has increased competition in areas and driven premiums down. In certain sectors, underwriters are making significant losses and to correct this position we are seeing many insurers exit unprofitable and non-core underwriting areas.
Whilst this may paint a depressing picture it is not all doom and gloom, we must remember that the Motor Trade market has for many years been very competitive when compared to historic averages. It is also true that it is not necessarily to whom a risk is presented when broking terms, but how that risk is presented. Businesses that spend a little more time with their presentations, to provide a greater insight into their practices and working with their Broker are generally reaping the reward. It is also important to engage a broker with genuine expertise and resources in the Motor Trade Market.
As a Lloyd’s Broker with a specialist Prestige Motor Trade practice calling upon the leverage of placing over £240m of premium in to the UK market, Stackhouse Poland is able to support our clients and use our experience to benefit clients.
Find out more
For more information, and to speak with a trusted insurance adviser, please contact Martin Baker (Motor Trade Specialist). Call 07458 059022 or email MartinBaker@stackhouse.co.uk