The year that was 2023

Our look at the boat insurance market for 2023

What has happened in the world of Haven Knox-Johnston
boat insurance during 2023

The year that was; 2023 was relatively stable for marine insurance with access to insurers and capacity reasonably consistent with 2022. In the broking space, we continue to see acquisitions continue, albeit at a slightly slower pace compared with the previous year, with smaller independent brokerages choosing to sell up to larger firms, predominantly funded by private equity. One notable difference for Howden UK&I compared with other firms is that employee ownership is core to the structure of its business model.

Consolidation and Trading Styles

Even our own re-emergence was a result of market consolidation. Haven Knox-Johnston became part of Howden UK & Ireland following the acquisition of its parent company Aston Lark, which in turn has led to the integration of Howden Fastnet, A-Plan Marine, A-Plan Commercial Marine, Euromarine and Curtis Marine to create a new  Howden UK & Ireland marine practice, trading as Haven Knox-Johnston, Haven Knox-Johnston Specialist and Haven Knox-Johnston Commercial.

Haven K-J now has three different trading styles to provide focussed expertise on different sectors within the marine industry, allowing it to broaden its proposition to an even wider client base than ever before.  This is part of an exciting future for our company as we bring together some of the most talented and respected industry experts to create a market leading marine insurance brokerage for leisure craft owners and business owners that exist to service the needs of the marine community.

Consumer Duty

2023 saw the introduction of a new Consumer Duty by the Financial Conduct Authority (FCA) that sets higher and clearer standards of consumer protection across financial services and requires firms to put their customers’ needs first. Delivering excellent customer service and fair value have always been the underlying principals of Haven K-J, but now the FCA has made it a regulatory requirement for all insurance providers to act in good faith and deliver fair outcomes for their retail customers.

During 2023 we spent significant time and resources to ensure that all our client facing teams, products and services fully understand and comply with the new Consumer Duty requirements.

Premium Pressure

Insurance premiums have not been immune to the rising cost of living that’s affected the entire country. Rising inflation leads to higher costs for parts and labour, which in turn feed into higher claims costs. Although inflation is slowly coming down, it doesn’t automatically mean lower premiums. This is because costs affecting businesses such as staff, cost of borrowing, energy and raw materials are still much higher than they were less than 2 years ago. The increase in the number of severe weather storms also means that underwriters will change their rating models to factor in the impact of global warming on marine risks.  As weather patterns change and the global economy remains turbulent, insurance premiums will continue to be directly impacted by these events.

The US Conundrum

One issue that remains a challenge is for those US residents who own boats based here in the UK. Almost all UK insurers have withdrawn this type of cover, making it very difficult for US residents to obtain insurance cover for their boats that are moored permanently in the UK.  There’s little to indicate that this situation will change in the near future.

The Lithium Question

The one big risk issue that’s a “hot topic” at the moment relates to claims exposure as a result of the increase in use of Lithium-Ion batteries and how insurers should deal with the requirements for the safe use and installation of them. The true exposure is still to be fully understood as Lithium-Ion related fire claims are complex and caused by a myriad of different reasons.

Toys such as scooters are often implicated in the ignition origins, with faulty chargers, damage, poor storage as well as cheap imports that are not manufactured to appropriate safety standards also factoring into the mix. Haven K-J recently hosted a webinar on Lithium-Ion batteries, and we are closely monitoring underwriters’ conclusions on their policy impacts when using them in the leisure marine industry.  We hope a balanced approach will be maintained and the policy amendments, when they come, will be in line with the type of boat they are providing cover for.

Related News

Why insure your boat with HK-J?