Lloyd’s of London trump insurers in rate hikes, Taiwan concerns linger

China’s possible military action could cause insurers to raise rates.

Underwriters from Lloyd’s of London are surpassing fellow insurance companies in terms of raising rates and slashing coverage due to risks from possible China’s military action over Taiwan, according to Reuters.

This geopolitical tension caused another cautious stance for insurers post-invasion of Russia over Ukraine. This led to insurers outcasting Russia and Ukraine from its policies or increasing rates.

READ MORE: Exclusive: Lloyd's of London leads insurers tightening Taiwan cover as conflict risks rise

Industry sources told Reuters that the same scenario in Taiwan could make it far more difficult for business to commence.

Taiwan, being the largest advanced semiconductor chip manufacturer, plays a vital role in the globe’s economy – leading to a potential loss of $1t annually from halting chip production.

ALSO READ: Insurers in Taiwan to face increased capital pressure: Fitch Ratings

Lloyd’s insurers are now eyeing risks relating to ships in ports located in the conflict areas, pointed Crispin Hodges, head of trade and political risk at Canopius.

Insurance companies that provide coverage for aircraft due to war are hiking up prices, entailing a smaller amount of coverage for issues like confiscation, a Lloyd market source said.