Priority Underwriting Announcement
The management of Priority Underwriting has made the decision that we will not be continuing to underwrite new or renewal business that incepts on or after 1st January 2019. At the same time, we wish to assure you all business underwritten and incepted in 2018 or prior is unaffected by this decision as the existing Lloyd’s capacity is in place for in-force contracts. The claims service and claims authority will remain the same as is currently in place.
After lengthy discussions with our capacity providers, while understanding our aims for 2019, they were not in a position to commit the level of capacity we required to maintain and to continue to build on the book of business we have worked with our broker partners to create over the past four years.
We are all aware of the broader underwriting conditions faced by our industry and the power sector is no different. The sector has seen poor underwriting results for the past three years, a period which has also seen some significant claims driven by natural and man-made losses. Upward adjustments in rating in response to this has not taken hold due to abundant domestic and centralised capacity, strong broker competition and client choice.
However, it remains frustrating that while our book of business has not been immune to the challenges faced by the wider power sector, its performance has continued to improve and there is every indication that improvement will be evident in this year’s results, and we are confident that trend would continue into 2019.
Lloyd’s decision to impose greater scrutiny on the business plans of the syndicates, and those classes where either rates or returns were not deemed to be sustainable, has influenced the Power sector and our capacity providers. Lloyd’s has focused on specific areas of underperformance class-by-class and required immediate corrective action in order to approve those plans for 2019. To a large extent Priority Underwriting has been caught in the cross-fire of this despite having taken its own corrective underwriting action and demonstrating improving results.
Notwithstanding all of this, we continue to believe the in-house knowledge, expertise and exclusive industry focus Priority Underwriting has, allied with a technical, analytical methodology to underwriting across the sector remains the correct approach. When the market conditions are right we have the tools and data to do this on behalf of a capacity provider in Lloyd’s or outside. Until that time, and until we can find suitable capacity, we will watch, with interest, from the side-lines.
We would like to thank our various capacity providers that have supported us over the past four years. We would also like to thank all the brokers and their clients for the support given to Priority Underwriting and to us personally during this period.
We will continue to be available to our broker partners for the foreseeable future to deal with amendments to existing contracts and to answer any questions or concerns, so please do not hesitate to make contact