P&I insurance: last renewals with no premium increase
No general increase (with a sole exception) for 2019/2020. However, according to PL Ferrari, premiums will grow in subsequent years
P&I premiums renewals set by February 2019 might be the last ones, after years, without general increase.
As reported in Genoa-based PL Ferrari brokering House's Market Report, during the next years all clubs listed in the International Group will raise general increase to offset the drastically ailing financial structure, affected by various causes and, last but not the least, by a substantial growth in the number of accidents.
The only club already submitting general increase in the next renewal will be 'West of England', whose premium will soar by 5%.
“Perhaps – illustrates PL Ferrari – West of England is seemingly only anticipating forthcoming market trend”.
According to Genoa-based brokering house (ready to tackle upcoming Brexit consequences, being in fact headquartered in Liguria maintown), the International Group is sending an evident message “premiums will need to be increased to ensure financial stability”.
In fact a large number of clubs are recording a substantial increase in accidents, particularly medium or significant ones.
Nevertheless, all IG members (except for West of England) determined not to charge general increase in the upcoming renewals.
For the time being the Acceptable loss Ratio, between P&I accidents paid and/or assessed in current year and P&I premiums assessed receivables, results negative.
However almost all clubs determined not to charge any general increase despite such financial results, nevertheless, they will update premiums based on individual statistics.
Still according to PL Ferrari's report: 50-60% of the premium paid by a shipowner is generally allocated by the club to settle pool retention and reassurance expenses, while only the left share is allocated to individual club retention, namely to cover accidents under 10 million Euro cap, which are in fact directly paid by the club.
In essence, each single shipowner would be hardly supported by the premium paid for the accidents suffered.
Besides changing this scheme, in order to downsize the general increase that will be necessarily charged in forthcoming years, each single club should provide members a continuous consultancy and customer care service (as PL Ferrari has been doing for years, besides providing brokering assistance).