Menu

iPMI Magazine Has Moved

iPMI Magazine successfully rebranded to iPMI Global in 2023 and has moved to a new home on the internet. To visit the brand new international private medical insurance business intelligence platform, please go to www.ipmiglobal.com

P&I Premiums Expected To Be Under Pressure At 2016 Renewals

P&I Premiums Expected To Be Under Pressure At 2016 Renewals

Despite P&I Clubs announcing that they are trying to achieve on average 2% increases in premium, ship owners with good records can look forward to reductions in premiums for protection and indemnity (P&I) insurance at the 2016 renewals, according to Willis Group Holdings.

"The International Group (IG) market has announced an average general increase of around 2%, with two or three clubs at zero, the majority around 2.5% and one club at 5%," noted Willis in its P&I Review 2015/16 report. "It is almost certain however that market forces will prevail and lower actual renewal results will be widely achieved. In the continuing challenging shipping market, we expect ship owning members to be pressing for the lowest renewal proposals in the 2016 renewals."

The report also highlighted a generally positive picture for P&I Clubs, noting that the International Group [of P&I Clubs] is in the healthiest state in its history. "Claims remain volatile and investment markets fragile, but a relative slowdown in number of major claims has allowed the IG market to make its first overall underwriting surplus since 2010." This, noted the report, is off the back of a 4% increase in total market premiums and a 3% reduction in net incurred claims. 

Willis has historically advocated for a decrease in release calls – a one-time charge incurred by ship owners who wish to be released from a P&I Club. Willis therefore welcomed the continued decrease in average level of release calls from 10% of total annual premium in 2012 to around 6.8% of total annual premium today. However, Willis also noted that there is still room for improvement.

"It is pleasing to note that releases have again improved during 2015. This follows the pattern over the previous 6 years and the hope is that this trend will continue," the report stated. "With a near doubling of the free reserves in the market since the last period of wide-spread unbudgeted calls, the market should now be in a stronger position. In such an environment, there still seems room for improvement on a 6.8% market average release call level."

Ben Abraham, Head of Willis's Marine division, said: "We are seeing the P&I market picking up with the first surplus since 2010/11 and nine out of 13 clubs reporting an increase in underwriting results. Nevertheless, the industry faces challenges: investment market returns have reduced compared to the previous year (down 2.9% from 3.7%), and claims remain volatile. The 2016 renewals will likely prove contentious as general increases come under pressure from ship operators looking to reduce costs in challenging freight markets whilst a number of underwriters sit on healthy underwriting surpluses."

He added: "The reduction in average levels of release calls highlighted by the Review is also encouraging. Over the past decade Willis has advocated for a decrease, questioning whether some clubs view release calls more as a commercial penalty rather than calculating a reasonable estimate of future exposure. We are now seeing some traction in this space as average release call levels have come down to a reasonable level, though there is still some room for improvement, within certain clubs."

 

back to top

iPMI Magazine Industry News

P&I Premiums Expected To Be Under Pressure At 2016 Renewals

P&I Premiums Expected To Be Under Pressure At 2016 Renewals

Despite P&I Clubs announcing that they are trying to achieve on average 2% increases in premium, ship owners with good records can look forward to reductions in premiums for protection and indemnity (P&I) insurance at the 2016 renewals, according to Willis Group Holdings. "The International Group (IG) market has announced an average general increase of around 2%, with two or three clubs at zero, the majority around 2.5% and one club...

22-12-2015 Maritime Marine Shipping

Retirement Wave And Technical Skills Gap Threaten Oil And Gas Company Growth And Profits

World’s oil and gas industry is in the midst of a talent crisis and needs to find alternatives to poaching from competitors. Mercer’s workforce analysis indicates that in the US alone, many large employers risk losing 50-80% of their retirement-eligible population in the next five years. To address this global energy talent crisis the just-released Mercer Global Oil and Gas Talent Outlook and Workforce Practices Survey shows that approximately two-thirds of...

15-05-2014 Oil Gas Power Energy

Claims Arising From Maritime Emergencies Can Be Huge

Claims Arising From Maritime Emergencies Can Be Huge

More than two years after the grounding of the Costa Concordia, which resulted in the death of 32 passengers and crew, the total loss figure is approaching $2bn – making it one of the largest marine casualties ever. As of the time of writing, the authorities have yet to figure out what will happen to the wreck of the vessel. It is only natural that cruise ship disasters dominate the headlines...

25-04-2014 Maritime Marine Shipping

Global Oil & Gas Workforce Survey

The oil and gas industry need to collaborate more if it is to successfully tackle the current workforce skills shortage. This follows the publication of The Global Oil & Gas Workforce Survey 2014, a joint report on the people focussed issues facing the oil and gas industry. According to the survey, which raises awareness of the people related risk in the industry and its impact on projects, engineers are the scarcest...

16-04-2014 Oil Gas Power Energy

Air Energi And Queensland University Of Technology Unveil Findings Of Ground-Breaking Research Into Workfroce Risks Within LNG Industry

Air Energi Group and Queensland University of Technology (QUT), have published ground-breaking research providing extensive analysis of the potential workforce risks related to Australasia’s LNG sector, particularly involving a contingent workforce. Entitled ‘Workforce Related Project Risks’, the report is based on in-depth interviews with a panel of industry experts drawn from a wide cross-section of perspectives, including operations, HR, project management, advisory functions, and contractors. A high level of rigour was...

16-04-2014 Oil Gas Power Energy

Republic Of The Congo Ratifies The Maritime Labour Convention, 2006

The Republic of the Congo deposited with the International Labour Office the instrument of ratification of the Maritime Labour Convention, 2006 (MLC, 2006). The Republic of the Congo is the 57th member State of the ILO, and the ninth African state – after Liberia, Gabon, Benin, Togo, Morocco, Nigeria, Ghana and South Africa – to have ratified the MLC, 2006. The country has a commercial fleet of 5,846 gross tons. The...

12-04-2014 Maritime Marine Shipping

New Measures To Protect Seafarers From Abandonment And Cover Claims For Death And Long-Term Disability

More than 300 representatives of seafarers, shipowners and governments, meeting at the International Labour Organization (ILO), have taken concrete steps to protect abandoned seafarers and provide financial security for compensation in cases of death and long-term disability due to occupational injury or hazard. The new measures are also aimed at improving the world’s shipping industry. “The adoption of the Maritime Labour Convention in 2006 was an historical milestone that heralded a...

12-04-2014 Maritime Marine Shipping

Nautilus Takes Seafarers Views On Pensions To ILO

Nautilus International will tell the International Labour Organisation (ILO) that seafarers would like to see a commitment to pension provision included in a future revision of the Maritime Labour Convention (MLC). Nautilus officials are joining maritime nations and representatives from around the world, meeting in Geneva this week to consider amendments to the MLC including the provision of financial protection against the abandonment of seafarers and compensation following death or injury...

08-04-2014 Maritime Marine Shipping