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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

Damen Signs MOU with Sydney City Marine

Damen Shipyards Group and Sydney City Marine have signed a Memorandum of Understanding (MOU) outlining the future cooperation of the two companies concerning the

Rolls-Royce Azimuth Thrusters Ordered for New Tug

Rolls-Royce has won an order for US255 FP z-drives from San Francisco’s Vessel Chartering LLC, a wholly owned division of Baydelta Navigation. The thrusters will

ClassNK Amends IGC Code Rules and Guidance

Classification society ClassNK has amended its Rules and Guidance for the Survey and Construction of Steel Ships in response to the latest industry developments,

Finance

Baltic Index Rises on Increased Demand Across Segments

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Thursday on higher demand across all vessel segments.

PALFINGER Finalizes Harding Acquisition

The PALFINGER Group closed the acquisition of 100 percent of the shares in Herkules Harding Holding AS, i.e. the globally operating Harding Group, supplier of lifesaving

Beijing Slams South China Sea Court Proceedings

Permanent Court of Arbitration ruling set for July 12. An international court said it would deliver a hotly anticipated ruling in the Philippines' case against

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Offshore Oil Port Authority Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction
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: 0.0903 sec (11 req/sec)