Ports and terminals attract the eye

This may well have something to do with the large amounts of premiums payable for the very large amounts of real estate and equipment premium payable for your typical modern container terminal. A large terminal group with locations all over the planet will have a property portfolio value which runs into billions of dollar. But look where all the expansion is going on. Quake stressed California. Storm tossed East Asia. Central America and the Gulf of Texas.

The trouble for insurers is that the more you write these kinds of risks – spread around the seven seas as it were – the more likely it is that the last and worst storm or natural peril incident will come calling on your balance sheet. In these circumstances, underwriters in the market pay very close attention to their reinsurances and cedings on to others.

Which companies are into the large port and terminal risks this late in 2006? Starting with the established players there is the TT Club, still collecting reinsurance recoveries after its adventures with Katrina, the Wavelength Consortium at Lloyd’s,The Navigators, St Pauls – fast growing new kids on the block – RSA (also new) and ITMU, but liabilities only, and now Watkins Syndicate at Lloyds is showing unmistakable signs of interest. The gentlemen from Brit are also late converts to P&Ts, as they are known, but this time they are backing the insurance of port properties only. Is this the spectre of underwriting lock step we see before our eyes? What is the likely consequence of all this capacity.

Higher rates? More satisfactory loss records? Market stability? Relatively immobile clients? Quiescent intermediaries? Not hardly.