The property loss record for mining appears to be improving, Willis Towers Watson says, rebounding after a series of “disastrous losses” in the previous two years.

Last year 79 mining claims representing $US1.25 billion ($1.71 billion) were registered, with 18 in Australia. Nineteen claims were for coal mines and 58 for ore and precious stones mines.

“Overall mining premium income almost certainly remains below US$1 billion, so the market as a whole would almost certainly have sustained underwriting losses in both 2018 and 2019,” the latest Willis Towers Watson mining risk review says.

“However, this level of losses is likely to be significantly reduced in 2020, with very few losses being reported to date for this calendar year.”

For property mining cover, rating increases are modest in comparison to other heavy industries, but retention levels, terms & conditions and sub-limits are all now being significantly affected by the hardening process, it says.

New levels of data required by insurers for underwriting was proving challenging to miners, particularly scrutiny by insurers of their schedule of values and a growing tendency to impose price caps on both property and business interruption amounts.

“At a minimum, we are seeing rating increases of 10%, escalating to as much as 40%-plus for the least favoured programs,” Willis Towers Watson says. “However, it should still be noted that for the most part these increases are still tempered compared to the rises imposed in other areas of the overall heavy industry portfolio.”

With capacity stable and the loss record improving, the review notes some buyers might be thinking that the hardening insurance market must be coming to an end. “Sadly for them, this is by no means the case.”

Under “strict instructions” from their management, mining underwriters across the world are being told to ensure that every program pays at least a nominal increase in rates, it says.

If the program features coal, underground operations, older tailings dams or exposure to natural catastrophe perils, the extent of the rating level increase will be much more significant.

A “minor contraction” in available capacity was due to “certain major insurers” offering reduced lines.

Chubb and Liberty are actively reducing their capacity in the thermal coal sector, with both scheduled to have withdrawn completely by the end of 2023, while AIG is strategically reducing its participation by as much as 40% for some programs.