Yacht Insurance Market Continues To Change
Six months into a ‘hardening’ insurance market in the yacht sector all owners of yachts no matter the shape or size who have faced their renewals have been hit with substantially increased premiums and deductibles while seeing the breadth of the cover they had reduced with lower sub limits and more restrictions placed on them. For larger yachts the more experienced insurers are insisting on yachts being in Class and this is likely to hit Asian owned yachts hard as many yachts in the region have been taken out of Class in recent years. We have seen premiums increase up to 40% for yachts with no claims and some are finding it hard to find cover at all as insurers lose appetite for risks that even last year seemed normal as they face restrictions on what they are allowed to underwrite in order to try and stop the flow of losses hitting their books. While increased costs are not what anyone wishes to experience this change has been long foretold and, frankly, in order to produce a sustainable business with yacht insurance there needs to be a good few years of increasing premiums ahead to get things back on track. Premiums are still about a half to a third of where they were 20 years ago. The hope is, however, that while premiums are likely to continue to increase the significant changes to cover afforded and increases in deductibles seen will be sufficient for insurers. This all depends on how the yacht sector performs in the coming couple of years and whether the changes effected actually work.
