Concern over re/insurance terms relaxation in London
Tuesday, 06 02 2015, Category: Insurance and Reinsurance, Country: United Kingdom
Rating agency A.M. Best says that it is concerned that relaxation of insurance and reinsurance contract terms and conditions in the London market could adversely affect results in coming years and that it is monitoring how companies deal with increased exposures.
It’s perhaps the strongest worded warning from a rating agency citing specific concerns over terms and conditions relaxation and broadening so far.
The expansion of terms, which effectively provides broader coverage to cedents, results in an increase of the underlying exposures assumed by underwriters. Hence it becomes more prevalent in a challenged and softened market, as we see now.