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.