P&I Market Hardening Says HSBC Insurance Brokers

Thursday, January 31, 2002
Premiums across the marine protection & indemnity market will have to increase in the absence of any short-term recovery in investment markets. That is the conclusion reached by leading Lloyd's broker and P&I specialist HSBC Insurance Brokers in its Protection & Indemnity Review 2002. The HSBC review says, "The clubs have witnessed a general downturn in investment income. Inevitably, this has eroded free reserves. In the case of some clubs, this has made little impact, but others are now facing potential difficulty, and some have taken the decision to post unbudgeted supplementary calls.

"One thing for certain is that premiums have to increase across the market as a whole, especially since there are few signs that investment markets will recover significantly in the short term. Free reserves will inevitably be eroded further." Nigel Russell, a director of the marine division of HSBC Insurance Brokers, says, "The P&I market has witnessed much change in recent years. It is likely that this change will continue. The fixed premium market has declined, and we now see fewer participants, often concentrating in specialist areas of shipping. P&I has seen a sharp fall in rates over a period of seven years. Technical underwriting has been producing losses for the vast majority of clubs for some time now. Reliance on investment income from reserves as a sole source of positive income has made some clubs more vulnerable than others.

"On a stand-alone basis, the P&I market is hardening. General premium increases range from twenty to thirty per cent. The cost of reinsurance will increase, and almost all the International Group clubs have reserved the right to pass on the costs of reinsurance increases for the policy year beginning February 20, 2002." The HSBC reviews concludes, "International insurance and reinsurance markets are hardening. Following the September 11 tragedies in the US, which are estimated to cost insurers in the region of $60 billion, the situation facing the insurance industry has worsened. The impact on insurance and reinsurance markets will be far-reaching. Increased reinsurance costs and a reduction in reinsurance capacity will affect the P&I clubs."

Maritime Reporter July 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

Pressure for Australia Sub Deal Grows

Australia to spend A$65 bln on ships and subs over 20 years; PM pledges A$40 bln for domestic shipbuilders. Australia will spend A$89 billion ($65 billion) on

Latest USCG Cutter At Boston Harbor

The Coast Guard’s latest 418-foot National Security Cutter James (WSML 754) entered Boston Harbor August 3, 2015. The James is the fifth of eight planned National

LNG Ferry Construction for Tallink Begins

The start of production of Tallink's new generation LNG powered fast ferry for the Tallinn-Helsinki route was celebrated on the 4th of August 2015 at Meyer Turku shipyard.

Finance

Asia to Northern Europe Shipping Rates Jump 177%

Asia to Northern Europe shipping freight rates for transporting containers jumped by 177.3 percent to $1.109 per 20-foot container (TEU) in the week ended on Friday,

FURUNO of Japan Increases Investment in ENL

ENL Group and FURUNO Electric Co. Ltd of Japan have announced that FURUNO has increased its investment into the New Zealand company to a total of 29.5%. The

Pressure for Australia Sub Deal Grows

Australia to spend A$65 bln on ships and subs over 20 years; PM pledges A$40 bln for domestic shipbuilders. Australia will spend A$89 billion ($65 billion) on

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Navigation Pipelines Port Authority Salvage Ship Electronics Ship Repair Ship Simulators
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1868 sec (5 req/sec)