The last years were not a sinecure for the yacht insurance industry, the yachting world has suffered several losses; A fire broke out in September 2018 two months from completion on a mega yacht of 147 meters at the Lürssen shipyard in Bremen-Aumund in Germany. The yacht was insured on the London/Loyd’s market under a builder’s all risk insurance policy for a sum insured of Euro 590 million, this is the segment profit for decades if not centuries.

The same year, in October 2018 a storm destroyed hundreds of yachts in Rapallo, some of them were super yachts. This devastated the yachting insurance industry and pushed some insurers to pull out completely from the yachting industry. Ten meters high waves have destroyed the storm barrier.

In August 2019, three super yachts of 80 m, 52 m and 36 m caught fire in a shipyard in Qatar. A figure of a total claim of USD 60 million has circulated. 

In 2021, Six yachts have been severely damaged by fire, most of the yachts were damaged beyond repair and three of them were above 30 meters category; while a further 17 yachts have been damaged from collisions.

There are other claims less spectacular, for example claims which happen during lifting, one indemnified for Euro 8 million and another one which happened on a 70 meters super yacht which capsized during lifting operation in Greece at a repair yard in March 2020. She was refloated later on the same month and being moved to another yard for repairs.

More recently, in July 2022, a 43.7 meters brand-new superyacht with a circa value of USD 25 million has been destroyed by fire in the Balearics, while mooring in the west coast of Formentera and only weeks after it was delivered to its industrial European owner. As per market news this claim was 100% insured by a reputable continental insurer which led to its loss of appetite in insuring yachts. Indeed, one single claim can jeopardize the whole results of a yacht insurance portfolio since the market/portfolios are rather small. In May of the same year, as per Guardian’s a yacht estimated at GBP 6 million sank after a fire, while she was moored in a marina in Torbay, south-west England, after firefighters fought hard to extinguish a fire on board.
To underpin that these last years, the fire risk has been a major concern of underwriters, on January 11, 2023 a huge fire took place at La Bajadilla marina in Marbella where 80 boats have been destroyed.

It is recommended to keep a close watch on lithium batteries and in particular the firefighting and detection systems in the charging/storage areas. It is strongly advised too to use a fire proof battery box for storage of all batteries and the yacht to be manned during batteries charging operations. If the electrical system was not part of the original purchase and has been retrofitted to make sure that the lithium-ion battery system has been installed by a certified marine electrician.

All these mega claims or attritional losses made a lot of yacht insurers pull out from the market. Those which remained introduced stringent restrictions and imposed hefty increases (30%-40% in the absence of claims and much more when there are losses). Lately, the market has remained tough but stabilizing with moderate increases, mainly to cater for inflation.

With Himaya, we will screen many yacht insurance markets in Europe to find out who is (are) the right insurer (s) for you, based on our bespoke wordings with competitive rates. The insurance market is a cyclical one and a nimble one. It is important to keep an in-depth knowledge of the market dynamics, market intelligence is of paramount importance.