Data & Intelligence

January 2020 Structured Credit and Political Risk Insurance Report and Market Update

Gallagher’s January 2020 market report, summarises market news, capacity, and changes, along with some thoughts on the challenges facing emerging markets (and, by extension, the commercial insurance market).

Whilst the figures presented in this report demonstrate that the commercial insurance market for credit and political risk remains buoyant, insurers in this class have not been unaffected by broader challenges within the industry. As an example, Lloyd’s closer scrutiny of the underwriting performance within the market has played a part in two of the syndicates having previously featured in this report putting their businesses into run-off. This is not necessarily a reflection of the results produced by the credit and political risk teams but more broadly the performance across multiple classes.

Nonetheless, the stamp capacity of all syndicates aggregated together across all classes (one measure of underwriting within the market) has grown 6% for 2020 which would suggest a broader level of optimism now that certain corrective action has been taken.

Insurers continue to monitor where their portfolio sits on the so-called ‘risk curve’, and a more conservative stance remains the prevailing theme. This has to some extent been helped by the market’s increasing willingness and ability to consider new structures and asset classes. It is fair to say, however, that, particularly for regular buyers and those with a perceived added value (such as public sector entities), underwriters remain open-minded to challenging risks.

To summarise, even with the broader challenges faced by the insurance market and perception of challenging political and economic risk, credit and political risk capacity levels remain similar to this time last year and so close to an all-time high.

About Gallagher
Founded by Arthur Gallagher in Chicago in 1927, Gallagher has grown to become one of the largest insurance brokerage and risk management companies in the world. With significant reach internationally, the group employs over 30,000 people and its global network provides services in more than 150 countries.
We help businesses go beyond their goals.

Matthew_Solley@ajg.com
Managing Director
+44 20 7204 6175