“Perfect Storm” Results in Most Challenging P&I Renewal

Press Release
Thursday, December 13, 2012

The upcoming Protection and Indemnity (P&I) renewal is poised to be the most challenging in a decade as a result of difficult economic conditions for ship operators, poor underwriting results and some of the largest claims in history, according to Willis Global Marine, a division of Willis Group Holdings plc (WSH:NYSE), the global insurance broker, in its annual P&I Market Review.

The P&I market results last year (2011/12) showed a 13% increase in incurred claims, a 5.9% underwriting loss and only a 2.7% investment return. Total market free reserves increased marginally (4%) but tonnage increased by 9% over the same period. The market is therefore larger, but proportionately slightly weaker than the previous reporting period.

Against this backdrop, 2011/12 has the dubious honour of registering the highest level of net paid and net incurred claims ever reported by the P&I market (2% and 8% higher than the previous record level in 2009/10).

Added to that, 10 out of the 13 P&I clubs reported underwriting losses. On a financial year basis in 2011/12, the largest individual P&I club combined ratio was 120%, the lowest was 85%. Neither of these extremes of underwriting deficit or surplus (respectively) should be sustainable in a mutual environment.

“With pressure on all sides, the 2013 renewal will likely present some of the hardest fought negotiations since the turn of the century,” explained Ben Abraham, Global P&I Practice Leader in Willis Marine and author of the P&I Market Review.

“It is self-evident that ship operators are facing one of the most challenging economic periods in a generation. It is similarly obvious that the P&I market is not balancing its underwriting results. Added to this, the reinsurance market has been presented with the largest and third largest claims in the history of the International Group (IG). The final contributing factor to this ‘confluence of events’ is a fragile and lacklustre investment market that is likely to allow only meagre returns.”

He continued: “In such a challenging renewal environment, the choice of specialist broker is critical to ensure that best value is achieved from this unique market.”

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

People & Company News

HMS Announces Management Hires

Marine services company Harley Marine Services (HMS) has expanded its management team, naming Don Martin as Vice President and General Counsel and Steve Carlson as Vice President of Engineering,

FMC's William P. Doyle Issues Statement on EL FARO Tragedy

On Thursday evening, October 1, 2016, the ship EL FARO went missing. The ship was en route from Jacksonville, Florida to San Juan, Puerto Rico. On Monday, four days after the ship vanished,

Swiss Re Establishes North America Marine Team

Swiss Re Corporate Solutions has expanded its marine business by opening a North America marine office. Beginning October 1, 2015, the New York-based team will provide ocean cargo insurance,


Dry Bulk Shipping Turmoil Set to Extend into 2016

Dry bulk shipping faces more earnings pain as a slowdown in commodities demand and a glut of ships are expected to pile on the pressure well into 2016, ship industry players said on Wednesday.

India Extends Tax Benefits on Bunker Fuel

India has extended the benefit of nil custom and production tax on bunker fuels to domestic coastal movement of containers, in a move to decongest its roads and reduce carbon emissions,

Ivory Coast Starts Construction of Abidjan Port Upgrades

Ivory Coast began construction on Tuesday of a four-year, 560 billion CFA franc ($962 million) project to build a second container terminal and widen the canal


USCG Completes Investigation into Ship Channel Death

The U.S. Coast Guard has completed its investigation into an incident in which a Mexican national was killed after being struck and by a patrol boat in the Brownsville Ship Channel in April.

ECDIS Ordered for 20 Indonesia Surveillance Vessels

Transas ECDIS has been selected for installation on board 20 surveillance vessels under operation of the Directorate General of Marine Resources and Fisheries Surveillance,

HMS Announces Management Hires

Marine services company Harley Marine Services (HMS) has expanded its management team, naming Don Martin as Vice President and General Counsel and Steve Carlson as Vice President of Engineering,

Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Pod Propulsion Port Authority Ship Repair Ship Simulators Sonar Winch
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: 0.4629 sec (2 req/sec)