Customs reassessment process creates anomaly in insurance industry

Against a background of diminished cargo volumes, there was a strange anomaly in the insurance industry, Lombard’s Francis Kingston told FTW. “Lombard did not see its exposure reduced. “In fact it increased slightly,” said Kingston – and that’s related to a Customs reassessment process. “A lot of our clients are very hesitant to do anything with their current facilities because it could mean they will be re-rated. “As soon as they are reassessed, if they apply for an increase or even a decrease, their guaranteed requirements will change significantly depending on the assessment that customs gives them. So many were reluctant to change their current facilities and even though volumes were down they did not reduce their facility with customs over fear that guarantee requirements would change. “If anything we were probably getting income on unutilised guarantees because of the reluctance to change.” Looking to the year ahead, Kingston believes growth will be very client-specific – “Certain niche markets will fly,” he told FTW.