Mike Davies Chief Executive of the Asian Branch of Axa Corporate Solutions said the cargo sector was facing its first underwriting loss for almost a decade and that the actions of the property underwriters are not helping.

“The property underwriters have well established models which enable them to accurately address the risk and rate it accordingly,” he said. “Cargo underwriters do not have such sophisticated systems and in some ways there are some which are still naive about the risks they underwrite and the prices they charge.

“We have long feared that the cargo sector was facing a slip into a loss and now that has become a reality for 2009 for the first time since 2000.

“We have also seen a situation where the loss levels for the 2007 and 2008 years of account have risen by 12 points in the space of a year.”

Mr Davies who is also Chairman of the Cargo Committee of the International Union of Marine Insurance (IUMI) said the static cargo risks were a growing concern.

“There is growing evidence that the property underwriters are increasingly looking to shift poor static cargo risks into the cargo market and take advantage of the lack of sophistication and naivety I have been talking about,” he explained. “We have cargo underwriters who are congratulating themselves as they have been winning business but they have not won it. It has been passed off to them by underwriters who see it as poor risk.”