Georg Duncker predicts tough P&I renewal negotiations

Significant general increases of P&I insureres expected

In view of the high pres­sure on the capital invest­ments of the P&I Clubs, the Hamburg-based insu­rance broker Georg Duncker predicts premium increases for the upco­ming P&I renewal on 20th February 2023.

In its new P&I Report 2022/23, the company warns that the large mutual insu­rers in the Inter­na­tional Group are aiming for general premium increases of between 5 and 12.5% ​​for the coming rene­wals. Steam­ship Mutual was the first to promise a 7.5% increase over the next year, and all fran­chi­sees (deduc­ti­bles) under $50,000 each will be increased by 10%.

Accor­ding to Georg Duncker, the under­wri­ters of the P&I Clubs are likely to use the incre­asing invest­ment losses due to the turbu­lence on the stock and bond markets as well as infla­tion in the cost of claims as arguments.

In view of the continued simpli­fied capi­ta­liza­tion of nume­rous clubs and the fact that no new major claims of more than $ 10 million have been added in the course of the year to date, considerable resis­tance on the part of the ship­ping compa­nies is to be expected. “We are prepa­ring for inten­sive discus­sions between shipow­ners, brokers and clubs in the run-up to the rene­wals on February 20,” writes Chris­tian Ross, mana­ging partner of Georg Duncker.

The first interim results from P&I Clubs have fueled concern that the impro­ve­ments in the loss ratios as a result of higher premiums and falling major claims will be canceled out by value adjus­t­ments on invest­ments. The rating agency S&P Global is again predic­ting losses for the majo­rity of clubs.

Georg Duncker warns that the P&I insu­rers will not stop at higher net premiums. The sepa­ra­tely calcu­lated reinsu­rance surcharges for ships are also likely to jump again. Based on current trends in the reinsu­rance market, the broker expects increases of around 10% in the corre­spon­ding rates per ship type, depen­ding on the type of ship.

Dated: 27.10.2022 (Hansa Online)

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