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 September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

Arctic Oil: Bourbon to Enter Arctic Market in 2016

Bourbon plans to enter the growing Arctic Offshore market in 2016 with a new Anchor Handling Tug Supply (AHTS) vessel built by the Vard shipyard. This AHTS (Anchor

Mitsubishi Exits Cruise Business; Books $357m Loss

Mitsubishi Heavy Industries, Ltd. (MHI) announced its decision to book an extraordinary loss from its cruise ship business in the company's consolidated financial

Wärtsilä Propulsion Equipment for 2 Fishing Vessels

Two new 78 metre purser/trawler fishing vessels being designed and built at Karstensen Shipyard in Denmark will feature Wärtsilä's main propulsion and control equipment.

Finance

Mitsubishi Exits Cruise Business; Books $357m Loss

Mitsubishi Heavy Industries, Ltd. (MHI) announced its decision to book an extraordinary loss from its cruise ship business in the company's consolidated financial

China to Import 335 MT of Naphtha, Wants More

China is set to import more than 335,000 tonnes of naphtha and diesel, rare moves for the world's no. 2 oil consumer given it has been self-sufficient at meeting domestic oil product demand,

Total CEO: EU Must Fight US Crude Export Law

First major public appearance of new Total head; he challenges European politicians to fight US ban. The new head of French energy major Total challenged Europe to fight Washington over the U.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Naval Architecture Navigation Offshore Oil Pipelines Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1583 sec (6 req/sec)