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More sharp rises in premiums at P&I renewals

More sharp rises in premiums at P&I renewals

London: Shipowners will be counting the cost of yet another round of premium increases this week as underwriters have been seeking rises ranging from 10% to 29% - and more for owners with unsatisfactory records - for the 2009/10 P&I (protection & indemnity) renewal taking place on February 20, comments Steve Griffiths, director at insurance broker Aon.

This is the ninth year in succession where clubs have attempted to improve their underwriting results through the imposition of a general increase, he adds, resulting in at least a threefold premium increase in owners' premiums "called" since 2001.

However, an examination of the clubs' report and accounts shows "the reality as quite different," says Griffiths. After almost a decade of increases, underwriters are still failing to achieve the rates they need to balance claims and overheads against premiums and many owners will question the gap between the advertised required premiums 'called' during the renewal period compared to the final result appearing in published annual reports.  
In the midst of financial turmoil, regulators and rating agencies continue to focus on solvency margins. The consequences of the global financial crisis in the second half of 2008 will not be known until the 2008/9 year accounts are released in late spring, but it is estimated that free reserves will have fallen by an average of 30%.

By 20 February 2009, six of the 13 International Group Clubs will have sought to refinance through a series of excess supplementary calls designed to raise a staggering USD535 million.  [18/02/09]