Specialty insurer Hiscox, and broker RKH Reinsurance Brokers, have announced the launch of a new variable consortium that will seek to find solutions for risks which are deemed to be hard to place within the market.
The consortium will look at a wide range of challenging general liability risks such as wildfire, trucking and construction, with a maximum line of over US$20 million.
Ed Wallis, General Liability Line Underwriter at Hiscox London Market, says: “Realising that some of the larger risks in highly exposed industries have been struggling to find capacity, we have been pleased to collaborate with RKH Reinsurance Brokers to put a truly innovative market response in place. The variable consortium offers general liability brokers and their clients a valuable point of entry for London market capacity and will bring risks into the Lloyd’s market that might otherwise struggle to find a home.
“Our consortium members have given us the mandate to consider a broad spectrum of risks in capacity-challenged areas of the liability market, on the basis that they need not be constrained by a predetermined share of the portfolio. This allows them to vary their line according to the risks we put in front of them, allowing us to aggregate a larger amount of capacity than we might otherwise be able to obtain through a traditional consortium structure when the right opportunities present themselves. Ultimately this means we can be of greater service to our clients when they need us most.”
The insurer said the consortium will enable Hiscox to bind capacity on behalf of their follow market, whilst allowing every consortium member the opportunity to flex their line up to a selected maximum on a risk-by-risk basis, rather than be tied to a predetermined share of all business.
“The variable structure gives Hiscox and their consortium members the flexibility to respond to more challenging and specialist risks, and offers brokers access to a meaningful amount of capacity from a single underwriting source, increasing the efficiency of the placement process,” it added.
The consortium is the third of a suite of US liability consortia led by Hiscox, and has been put in place to “respond to a shortage of capacity in harder-to-place areas of the excess and surplus lines market, which fall outside of the scope of their existing consortia”.
Combining the capacity of six Lloyd’s syndicates, the variable consortium is open to large risks domiciled in the USA and has already bound $1 million GWP.
Tom Gauge, Executive Director at RKH Reinsurance Brokers, said: “We were delighted to work with Hiscox to bring true innovation to the consortium placement process, which in turn has enhanced their product offering, and ultimately the ability of the Lloyd’s market to respond to its clients in a challenging trading environment.”