|Copyright: ||(c) 2011 A.M. Best Company, Inc.|
|Source: ||A.M. Best Company, Inc.|
The construction industry is expected to be one of the first industries to improve as the U.S. economy comes out of its slump, and Allied World U.S. is ready to write inland marine when it does.
"That turn will happen and when it does, we know we are ready. We have the people on the ground, and we are poised to rise with this market place as it continues to expand," said Alan Crater, vice president of Allied World's new inland marine division. Crater, who is based in New York, said the division will target all filed and non-filed classes of inland marine business in the United States, with a focus on the construction industry.
That is the biggest industry in inland marine, and Crater said there are signs that the market is improving. "The economic stimulus money is flowing out to the public sector. We are seeing municipalities renovating schools and court houses, and highways are being repaired. The industry is still not where we were in 2006, the peak of the construction industry, but we believe it will be one of the first to come back," Crater said.
In addition to new construction projects, Allied World U.S. is writing coverage on rehabilitation projects, "which are often more difficult to underwrite," Crater said.
About 50% of inland marine business stems from the construction industry, but construction projects end.
"Therefore, we are looking for other classes of business that are renewable," Crater said. "We will look at any line of inland marine. We may not write it, but we'll look at everything."
Other classes of business include warehouse legal coverage, motor truck cargo, fine arts (galleries and museums), plus anything in transit.
"It's an incredible variety of risks," Crater said. From carnival rides that are traveling the country to mobile MRIs in trailers to communication equipment and cell phone towers, inland marine business can cover a lot of ground, he said.
Allied World U.S.'s inland marine division is available to insureds in all 50 states on either an admitted or surplus lines basis, and provides broad coverage with limits of up to $50 million.
Last month, Allied World Bermuda, a subsidiary of Allied World Assurance Co., become one of several non-U.S. reinsurers to receive regulatory approval to post a lower amount of collateral in Florida. Allied World now qualifies as an "eligible reinsurer," and will now be able to post 20% of loss reserves on property catastrophe reinsurance in Florida rather than the 100% required by most non-U.S. reinsurers, the company said (BestWire, March 3, 2011).
Allied World Assurance Co. currently has a Best's Financial Strength Rating of A (Excellent).
Shares of Allied World (NYSE: AWH) closed at $63.64 on the afternoon of April 25, up 0.35% from the previous close.
(By Meg Green, senior associate editor, BestWeek: mailto:Meg.Green@ambest.com)