The wave of hurricanes that has devastated many parts of the Caribbean and the Gulf Coast of America has hit Yacht Insurance companies hard. Many billions of pounds and dollars are invested in vessels large and small in this part of the world and the London Insurance market caters for the large part of coverage and underwrites most of the risks.
Yacht Insurance has been suffering over the past few months due to the credit crunch with small boat insurers reporting a steady drop in business compared to this time last year. Despite Britain’s yachting and boating success at The Olympics, the boat is often the first thing to go when people start making cutbacks. Similarly orders for new sailing vessels are down.
With the damage costs of the wave of hurricanes mounting daily – Early reports suggest that Hurricane Katrina alone could cost more than £100m, according to the latest estimates from American risk assessors, however this could easily mount rapidly over the next few weeks as claims assessors have yet to asses the damage in the more remote areas. A re-insurance expert has said that reserves of $18 billion are being bandied around. Senior UK industry risks managers are also suggesting the total loss from the storms could be in excess of £10 billion when the winds finally settle.
A spokesperson for Yachtline – one of the UK’s largest online yacht insurers – and specialist Caribbean yacht and mega yacht underwriter, refused to comment on the amount of claims received but did say that the number of claims was up four times on this time last year.
It looks like it may be stormy waters ahead for Yacht Insurance this year!