Hiscox launches variable consortium for ‘hard to place’ general liability risks

Hiscox and RKH Reinsurance Brokers have launched a new variable consortium targeting a wide range of general liability risks such as wildfire, trucking and construction.

Described by the London-listed carrier as a market first, the consortium offers a maximum line of $20mn per risk and enables Hiscox to bind capacity on behalf of their follow market.

The consortium is the third of a suite of US liability consortia led by Hiscox and has been put in place to respond to a shortage of capacity in harder-to-place areas of the excess and surplus (E&S) lines market.

The structure allows every consortium member the opportunity to 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.

The variable structure also provides Hiscox and their consortium members the flexibility to respond to more challenging and specialist risks and offers brokers access to a “meaningful amount” of capacity from a single underwriting source, increasing the efficiency of the placement process, Hiscox said.

Combining the capacity of six Lloyd’s syndicates, the variable consortium is open to large risks domiciled in the US and has already bound $1mn GWP.

Ed Wallis, general liability line underwriter at Hiscox London Market, acknowledged that some of the larger risks in highly exposed industries have been struggling to find capacity and noted that 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.

“Our consortium members have given us the mandate to consider a broad spectrum of risks in capacity-challenged areas of the liability market, on the basis that they need not be constrained by a predetermined share of the portfolio,” Wallis added.

“This allows them to vary their line according to the risks we put in front of them, allowing us to aggregate a larger amount of capacity than we might otherwise be able to obtain through a traditional consortium structure when the right opportunities present themselves.”