Aston Lark acquires ES Risks
ES Risks explains the motivations behind the acquisition and a number of developments in the yachting market…
Following the news that Aston Lark had acquired ES Risk, SuperyachtNews speaks with the team at ES Risk about the motivations behind the acquisition, as well as exploring recent developments within the superyacht insurance market.
“There has been a significant degree of acquisition within the market recently. ES Risks as a business has two operating entities that were of interest to Aston Lark. ES Risks Europe, which is an Athens-based entity and some months ago we made the decision that we needed a permanent and regulated route into Europe given that 30-40 per cent of our business comes from Europe. We, therefore, started ES Risks Europe, which is now a Lloyd’s cover holder and broker that is passported into every European company,’ starts Chris Hobbs, ES Risks’ managing director. “We also have ES Risks Limited, which was the originating part of the business, that serves the UK and the rest of the world.”
Hobbs explains that Aston Lark’s operation to date has primarily been focussed on the acquisition of regional brokers that typically work directly with policyholders in their local area. ES Risks by contrast would be broadly considered as a London Market business, which deals with non-regional brokers and that has an overseas reach with clients who need access to London for their insurance needs.
“Part of the attraction was that we have a European presence and also a diversification from their normal business purchasing and, as it were, we hopefully represent the start of the London market operation,” continues Hobbs. “The yacht business is a specific niche within ES Risks. Was the yacht operation of interest to Aston Lark? Absolutely. Was it the key driver, not necessarily, but it was one of a number of reasons for the acquisition.”
Indeed, ES Risks is not the first acquisition on the part of Aston Lark with superyacht interests, with Aston Lark having previously acquired CRS Yachts.
“Within the main core of Aston Lark, they have a lot of clients with high-net-worth status and they have been using CRS Yacht, and now hopefully ES Risks, to bolster their yacht book. Yachting is a good place to be at the moment for brokers as rates are going up and up, and with the market being much harder than it has been for a number of years,” explains Chris Davis producing broker/senior broker at ES Risks. “Second-hand yacht sales have been crazy this year with approximately 400 yachts of €5million and higher finding new owners, compared to around 100-150 in years before.”
That being said, Davis does outline some challenges within the superyacht insurance sector. Chief among the challenges is the well-reported increases in premiums and the need to manage client expectations given that most, without having had a previous claim, find it hard to comprehend why their premiums are increasing. Secondly, Davis refers to the well-reported issue of marina and yard aggregation and the continued risk that this poses for underwriters.
Interestingly, however, with the boom in superyacht purchases has also come an increase in capacity from businesses that have not typically taken interest in the superyacht market. Indeed, when the commercial lines of business have struggled in previous years, this has been one of the major contributors to rapidly falling and unsustainable premium levels.
“We are seeing more A-rated insurers from Europe now writing yacht business because they haven’t suffered from any of the large historic legacy losses. There are, therefore, able to enter the market at a higher rate and get better returns for their money. We are seeing this quite prevalently, however, there is no pressure on rates at the moment. There is more capacity in the market, but you have to go and look for it, it doesn’t have a big sign above the door,” continues Davis.
With both second-hand and new build sales booming at the moment, it is little wonder that acquisitions within the superyacht space are appealing, nor is it surprising that other insurers are looking towards the strong performance of the superyacht market to strengthen their businesses.
Click here to become part of The Superyacht Group community, and join us in our mission to make this industry accessible to all, and prosperous for the long-term. We are offering access to the superyacht industry’s most comprehensive and longstanding archive of business-critical information, as well as a comprehensive, real-time superyacht fleet database, for just £10 per month, because we are One Industry with One Mission. Sign up here.