International Group of P&I Clubs suffer hefty reinsurance rate hikes after hiatus

The  International Group of P&I Clubs suffered a hefty hike in reinsurance premiums even after tweaks to the structure of its coverage. Shipowners will see a roughly 33 percent rise in their rates going forward, the group said following renewal negotiations.

"The difficult prevailing market conditions and the need to maintain the broadest cover available have led to significant rate rises for 2022," the organization said.

The new deal represents a compromise between a "contract that continues to allow Group Clubs to offer uniquely high levels of free and unlimited coverage for all risks" and "some adjustments" to the main general excess of loss placement ($2 billion excess of $100 million), the group said.

“The Group’s decision to renew the majority of its programme for two years in 2020 provided our members with the benefits of price stability and continuity of cover for those two years," said Mike Hall, chair of the International Group's reinsurance committee.

"However, during the intervening period a combination of hardening market conditions, a global pandemic, a number of coverage issues, plus a worsening claims record, have all resulted in the 2022 renewal being particularly challenging to negotiate."

In the event, malicious cyber, COVID and pandemic risks were capped in the general excess-of-loss and select other placements, along with other changes to structure.

The 13 P&I Clubs which comprise the International Group provide marine liability cover (protection and indemnity) for approximately 90 percent of the world's ocean-going tonnage, the group claims in its online presentation.

Each Group Club is an independent, not-for-profit mutual insurance association, owned by its shipowner and charterer members.

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