What’s in store

for 2019

Logistics companies will have to redouble their efforts this year to convince insurers to provide cover for their major risks. These companies will increasingly have to accept higher retentions and invest in prevention. This is the only way to ensure that freight forwarders’ liability prices remain stable.

Higher prices or worse conditions? Many companies with marine cargo insurance policies will need to face up to this question in 2019. This is because the conditions for obtaining reasonably priced cover in this line have worsened. In particular the US sanctions policy, coupled with the associated pressure on Iran and leading industrial companies, is having an immediate impact. The first insurers have already questioned their globally active commercial customers extensively about their sales markets in order to sustain the comprehensive, attractively-priced cover. Companies are well advised to come to long-term contractual agreements.

The days of cheap credit for companies are coming to an end. Economic conditions look set to worsen. Coupled with rising interest rates, this will lead banks to tighten up the terms on which they’re prepared to lend money. As a result, companies could find themselves short of the necessary liquidity to finance their ongoing business. Therefore, companies should review their credit control processes. There are often opportunities to be found here – for example through factoring and by reducing suretyship obligations in the credit insurance market. As the economic slowdown continues, protection against the contesting of insolvency transactions will assume greater importance for companies this year.

Companies that have taken out engineering insurance for their plants can count on the price of this remaining stable this year. However, there are some exceptions where insurers are set to charge companies higher rates or apply higher deductibles. But this only applies to policies with a high loss ratio. Insurers will stand firm on this point – especially those companies faced with poor figures for 2018 overall due to major claims. Nevertheless, as most providers of engineering insurance expect good results for 2018, the market situation will remain fundamentally customer-friendly.

For directors and CEOs of German companies, 2019 presents plenty of new responsibilities: cyber security, IT security and data protection are developing into major aspects of D&O liability. Brexit requires strategic and formal measures to be put in place, depending on the company’s field of risk. Compliance and the introduction of corresponding management systems are becoming increasingly important items on the agenda. The good news: the financial lines insurance market is offering companies sufficient capacity to cope with the rising demand for insurance. However, it is proving increasingly challenging to put together and integrate suitable insurance solutions. D&O, cyber, professional indemnity and fidelity insurance must be perfectly intermeshed so that there are no gaps in cover for managers and companies.

Good liability insurance cover for a fair price: that’s what most companies will be able to enjoy this year. Overall, it’s still a buyer’s market. Not even the merger of individual insurers will change that. Given the high capacity available in the market, insurance conditions for companies look set to remain attractive. Only a few lines and companies with larger losses will be faced with price increases. Companies from the automotive supplier sector will have to present detailed risk information in order to obtain the best possible insurance cover.