The essence of successful insurance broking is risk management – assisting clients to manage and present their risk in the best possible light to underwriters.
The importance of this is evident in the adventure tourism market – a field in which JMD Ross has specialist expertise. High-risk adventure tourism operators are having difficulty placing cover at affordable premium rates, or indeed at all, because of constrained market capacity and a reduced appetite from underwriters.
That’s caused by a combination of factors, including a hardening insurance market, which means premiums and excesses are increasing, and underwriters are imposing stringent terms and conditions under which they’ll insure hard-to-place risks.
Increased costs of litigation, following incidents in high-risk adventure tourism, also influence premium hikes across the sector.
Much of the adventure tourism industry is placed in the Lloyd’s of London global market, which recorded a loss of £1 billion in 2018, after a £2 billion loss in 2017.
Its profitability improved in 2019, but the market is still tightening its belt and being particularly cautious on a range of risks.
News media has picked up on the problem, particularly in Western Australia, where jet boat companies, quad bike tours and other adventure tourism businesses are having difficulty buying liability insurance.
Jonathan Ross, Tourism Account Director at JMD Ross Insurance Brokers, has been interviewed by both the ABC and Channel 9 in Perth and has explained the conundrum for tourism operators angry that they can’t buy cover and frustrated that they can’t operate without it.
“It’s not easy to place adventure tourism risks in the current market but a deep understanding of global insurance markets and specialist expertise in the field is vital,” Jonathan told the media outlets.
He said the global insurance market was now more risk averse. “It’s been a heavy couple of years for Lloyd’s. They’ve been rescaling their books, especially for liability risks. The market can wear losses for a few years but, after a while, underwriters have to toughen up.”
The broker’s role is to scour the global markets to find reputable security to underwrite hard-to-place risks, and that’s what JMD Ross, with its network of international connections, is doing.
Jonathan has been trying to assist operators to improve their risk management to better present the risks. “A sound, well-researched risk management framework can make the difference in an underwriter agreeing to place the risk,” he said.
Covid-19 has also created problems for tourism operators unable to operate, but who still have to pay premiums. Jonathan and the JMD Ross team have been assisting clients to “hibernate” their premiums until they can get back to work.
Jonathan’s written more about the options available to tourism operators here.
To discuss your risk management and insurance requirements, please contact:
• Jonathan Ross T 02 9478 0825 E firstname.lastname@example.org
• Tim Ross T 02 9478 0808 E email@example.com
• John G Duncan T 02 9478 0814 E firstname.lastname@example.org
• John Davaine T 02 9478 0835 E email@example.com