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Rate concerns dominate in LatAm as financial lines market sees claims spike

Latin American insurance markets are becoming more international and seeing regulatory improvements in some areas.  However, the challenges are growing for financial lines, as the global rate increases currently seen in D&O and aligned capacity / rate crunches in cyber cover begin to bite.

New Dawn Risk’s latest white paper Connecting across continents: International reinsurance solutions for Latin America is launched today, and highlights the interactions between Latin American markets and London, as well as the tensions that capacity and rate issues can bring.

Download the white paper in English or in Spanish here.

Max Carter, CEO of New Dawn Risk, said: “Latin America is seeing growing demand for increasingly complex insurance products.  One notable development has seen local brokers putting together in-country consortia to cover some larger risks, reducing their reliance on London. But the need for international cyber and financial lines cover is growing on a steady trajectory. Claims continue to spike in cyber, with ransomware being the most noted ‘problem child’, causing prices to be steeper than the broader class. These lines are seeing decreased local capacity, creating a growing need to look to London for its expertise and appetite in these areas.”

Manuel Sicard, Senior Broker for Latin America, commented “The link between London and Latin America is strengthening, and it is now more relevant than ever to examine what each market needs to know about the other to help trade flow more smoothly. We have brought together views from Latin American experts both in-country and in London, along with our own insights as a specialist broker dealing with both regions, to publish our first Latin American market report.”

Notes to Editors

Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims.

New Dawn Risk has today launched its latest white paper on insurance for the US legal cannabis, CBD and hemp markets. The 2021 report is called “Opportunity knocks at last in the US cannabis insurance market”.

Download the white paper here.

Since the publication of the previous report in 2020, US sales of medical and recreational cannabis have grown exponentially, reaching $17.5 billion in 2020, a 46 percent increase from 2019. In addition, the legislative landscape in the USA has been transformed by the arrival of the pro-cannabis Biden presidency, supported by a Democratic majority in both Houses.

A new CLAIM (Clarifying Law Around Insurance of Marijuana) Act has been introduced to the Senate, alongside the parallel SAFE Banking Act, and both are expected to pass into law by the end of 2021.  This will at last permit insurers to work with the cannabis industry legally; and will also reduce some of the insurance risks that previously dogged the industry.  For example, D&O cover will become a legally available option, and marijuana businesses will be able to regularise their banking and cash operations.

The updated white paper examines the key drivers of growth whilst exposing both the potential premiums and the size of the insurance gap for the cannabis industry in the US. Headlines include:

  • 36 US states, and Washington D.C., have now legalised cannabis for medical or recreational use.
  • Americans now spend almost as much on legal marijuana products as they do on Coca Cola.
  • Cannabis dispensaries were deemed “essential businesses” by many states and therefore remained open during lockdown.

Max Carter, CEO of New Dawn Risk, commented: “The legal and regulatory environment of the cannabis industry has transformed over the past year.

“The changing attitude towards the cannabis industry, and new State and Federal legislation present an exciting opportunity for insurers to work with growers and sellers. With legalisation of banking and insurance, the door seems likely to open to what could be a $1bn premium market.

“On the consumer side, cannabis was deemed an “essential business” during the Covid-19 pandemic, and the growth of the sector seems inexorable. New Dawn Risk is committed to working with carriers and clients to share knowledge and insights to help identify and deliver cover for this untapped market.”

Notes to Editors

Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.

New Dawn Risk’s report casts light on the improved prospects for international firms as India aims to deploy drones, satellites and mobile technology in an effort to cut insurance costs

Download the white paper here.

Singapore, November 2nd 2020: Lloyd’s broker New Dawn Risk has today launched its new report: Technology brings new opportunities for India’s crop insurance scheme

The report details changes that have been made to the government-sponsored scheme during 2020, which are designed to make it more efficient and ultimately more attractive for the nation’s farmers and for participating insurers.  These include the introduction of a three-year contract for insurers; and strict rules to both prevent delays in claims handling and avoid moral hazard.

The centre point for change, however, is the introduction of a range of new technologies, including a mobile portal, and the use of sophisticated drone and satellite technologies.  All of these are designed to allow automated handling of the many claims that the scheme generates, and, ultimately have the power to transform the profitability of the scheme for insurers and reinsurers.

Contributing to the report, the Agricultural Insurance Company of India commented: “With the advent of new concepts in agriculture, the scope for crop / agriculture insurance in India is vast. The main challenge is consistency. The scheme has changed drastically in a very short space of time. Reinsurers believe there is ample opportunity but only if they decide to commit to this product for the longer term and take a long-term view despite the changes.”

Max Carter, CEO of New Dawn Risk commented: “India could certainly see new reinsurers entering its state-sponsored agricultural insurance market if costs were driven down for the local insurers, who have previously borne heavy administrative and operating costs.”

“The increased use of satellites and drone imagery technology and adoption of high-quality mobile apps to carry out CCE’s, remote sensing methodologies to assess crops and low-lying satellites (LEOs), means that India has taken positive steps towards increasing efficiency and reducing costs of administration. We hope that, with such positive news, our guide will be a useful source of information for international reinsurers who might consider participating in this refreshed scheme.”

For more information: Victoria Sisson, Luther Pendragon, +44 (0)7941 294872

New Dawn Risk Group Limited has today launched its white paper analysing insurance cover for the US legal cannabis, CBD and hemp markets.

Download the white paper here.

The report: “Understanding and opening up the US cannabis insurance market”, exposes both the potential premiums and the size of the insurance gap for cannabis-related products in the US.  Headline statistics include:

  • In 2018 sales of medical and recreational cannabis in the U.S. were nearly nine times higher than sales of Oreo cookies.
  • The legal US cannabis industry would pay about $1 billion in annual premiums were it insured to levels normal for other businesses.
  • In 2018 the US market saw an estimated $8 billion in legalized cannabis sales. This could rise to over $40 billion by 2025.

The report also looks at the challenging legal environment for insurers, discusses possible coverage solutions and analyses the issues for each category of insurance cover, including: D&O, cyber, product liability, workers compensation, cash and contents insurance, crop insurance and fleet auto and cargo.

Max Carter, CEO of New Dawn Risk, commented: “Legal cannabis is a rapidly growing market, currently with a legal foothold in over thirty US states.  Right now, the COVID-19 outbreak has led to increased demand for cannabis in the US and stores in many states have been allowed to reopen or offer curbside sales.  However, the crisis has also exposed the financial pressures on many cannabis firms, with many VC-backed cannabis firms struggling already to meet financial projections.  A COVID-19 recession, which seems all but a certainty, will only increase such financial pressures for young cannabis businesses.

“The pandemic will make it even tougher for cannabis producers to obtain insurance as providers further tighten terms and conditions and introduce exclusions, while insurers who may have been looking to enter the marker will put their plans on hold.  With the Federal Government shut down and the possibility of a change of administration in November’s presidential election, the progress of legislation that would open up the cannabis market to insurers will be delayed.

“This reality fails to reflect the fact that many firms have significant insurance needs that are critical to help them manage the risks that exist in this young industry, with its untried legal and societal framework. 

“Despite all this, the growth of the sector is inexorable and New Dawn Risk is committed to working with carriers and clients to share knowledge and insights to help identify and deliver creative solutions for this market. In just one example, we have already successfully placed cyber cover for a number of cannabis businesses. But we want to do more. And that means furthering the discussion, which is where we hope this report can contribute.” 


Notes to Editors

Established in 2008, New Dawn Risk is a dynamic, specialist insurance intermediary providing bespoke advisory solutions. We focus on complex, international liability and other specialty insurance and reinsurance. Clients large and small profit from our expertise, creativity and responsiveness – from risk assessment through to claims. 95% of our business emanates from outside the United Kingdom.