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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