The insurance marketplace as a whole could benefit greatly if marine insurers would incorporate more catastrophe modeling in their pricing and profiling of risk accumulations, according to American Institute of Marine Underwriters (AIMU) chairman Roger F. Ablett.
Speaking at the 115th AIMU annual meeting held in New York City late last week, Ablett noted that in the aftermath of Superstorm Sandy there had been a call for marine underwriters to make greater use of cat modeling in their risk analysis.
Despite the shortcomings in modeling hull and cargo risks which are transient, as opposed to property risks which are static, Ablett told the gathering:
Some 15 percent of Superstorm SandyÃ¢â‚¬â„¢s total estimated insured loss of $19 billion was marine-related.
The marine loss of $3 billion exceeded the total amount of U.S. marine insurance premiums collected last year, Ablett said.
The two marine lines most affected by Sandy were cargo and yachts.
Cargo recorded a combined ratio of 131 percent in 2012, up from 88 percent in 2011.
The combined ratio for yachts was 135 percent in 2012, some 40 points higher than the prior year.
AIMUÃ¢â‚¬â„¢s annual survey of its members also reported direct written premiums of $2.2 billion in 2012, with a combined ratio of 115 percent.
That represents a slight drop in premiums from 2011, while the combined ratio deteriorated from just over 90 percent.