Big losses and low rates are driving some major insurers out of the sports insurance market. The latest to step away is the local operation of American giant AIG, whose CEO John Butselaar says the rates available are “simply too thin”.

AIG is still quoting for business in the niche, but the competition from other areas, particularly underwriting agencies, is intense.

“We’re interested in quoting on new business, but only on the business we need,” Mr Butselaar said. “It’s reached the point where losses of more than 100% are possible, and that’s not something a prudent insurer wants to be involved in.”

Other insurers agree, with one saying major insurers are doing less in the sports insurance area because of the competition form niche operators.

“It’s hard to run a disciplined book in that area at present,” one underwriter told Sunrise Exchange News.

It’s the niche insurers and underwriting agencies which are making life tough for the larger companies. “Some niche operations are coming in and out of the accident and health market,” one said. “They get out when they get burned.”