Hiscox and RKH Reinsurance Brokers have launched a new variable consortium with a maximum line of over $20 million for a wide range of challenging general liability risks such as wildfire, trucking and construction.
The variable consortium is the third of a suite of US liability consortia Hiscox has led. It combines the capacity of six Lloyd’s syndicates and is open to large risks domiciled in the US, and has already bound $1 million in gross written premiums.
The consortium was 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 existing consortia. Consortium members can 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.
It means the insurers can respond to more challenging and specialist risks, while giving brokers access to a meaningful amount of capacity from a single underwriting source, increasing the efficiency of the placement process, Hiscox said.
Ed Wallis, general liability line underwriter at Hiscox London Market, said the consortium can consider more capacity-challenged risks because members are not constrained by a predetermined share of the portfolio. “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,” he said.
Tom Gauge, an executive director at RKH Reinsurance Brokers, said the move was a true innovation in the consortium placement process.
“As specialists in Lloyd’s consortia at RKH Reinsurance Brokers, we recognise the value that these structures can bring to the underwriting room in terms of capacity, distribution, and expense management, and the important role that they will no doubt play as the Lloyd’s market reassesses how risks can be placed most efficiently,” he added.
Hiscox, RKH Reinsurance Brokers, Ed Wallis, Tom Gauge