Willis reviews shipowners’ P&I market
Willis has reported that investment income in the Protection and Indemnity (P&I) market that provides shipowners with marine legal liability cover bounced back to $680 million in 2009/10, after record losses cost the market $840 million in 2008/09.
In its latest P&I Market Review, the firm reports an overall underwriting deficit of only 1% for the 2009/10 financial year, with the result achieved against the highest levels of claims in the market’s history.
However, the broker warns that record claims levels and a continuing gap in the performance of individual P&I Clubs (the insurance mutuals that provide liability cover for their shipowner and charterer members) could present challenges for the market in 2011.
Willis’ P&I head, Ben Abraham, comments: “Claims are similarly at an all-time high, worryingly not due to a surge in very large claims, but to the increasing cost of more routine claims.”
Turning to the variance in performance between individual Clubs, Mr Abraham adds: “While two thirds of Clubs in the market are performing close to balance, a minority of Clubs still have some way to go to break even.”
As a result “the underperforming Clubs are inevitably more vulnerable to fluctuations in claims or investment performance”, says Mr Abraham.
Category: Business Insurance News, Insurance News, Willis News
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