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2013 Aon P&I Review highlights deterioration in combined ratios in P&I market
Tough underwriting conditions mean P&I clubs expected to seek general increases of between 5% and 15% at 2014 renewal
London
AON

LONDON (04 October, 2013)  Aon Risk Solutions, the global risk management business of Aon plc (NYSE: AON), the world’s leading risk management firm, today launched the Aon 2013 P&I Review. The review predicts P&I clubs’ general increases at the 2014 renewal of between 5% and 15%.  Much of this is due to a challenging underwriting environment, a need for clubs to demonstrate ongoing financial stability in the face of ever increasing scrutiny from rating agencies, and sustaining the stringent capital requirements imposed on them by financial regulators.

Aon’s annual P&I Review offers clients a comprehensive overview of current market conditions including: top-line information on the 13 mutual clubs, historical analysis on the sector’s performance and a market forecast on what clients may expect at the next renewals.

Aon 2013 P&I Review

The Aon 2013 P&I Review highlights that only modest investment returns ranging from 2.5% to 7.8% were achieved across the 13 International Group P&I clubs for 2012/2013. Most clubs’ technical underwriting remained loss making with the claims environment remained challenging.

Aon also notes that with clubs’ combined ratios ranging from 95% to 123% for the 2012/2013 policy year, P&I club boards, especially those of clubs that feature at the higher end of this range, will find it rather more difficult to agree to provide any of the ‘concessions’ offered at the 2013 P&I renewal, when deciding on their club’s requirements for the 2014 P&I renewal.

Simon Schnorr, Executive Director and Head of P&I, Aon Marine Practice, said “Our data demonstrates that the P&I market continues to face considerable challenges. A lack of profitable underwriting, coupled with adverse claim conditions and the stringent solvency requirements faced by P&I clubs, means that we expect pressures to raise premium rates at the 2014 P&I renewal. This may also extend to the renewal of the International Group reinsurance, However, following the sizable increase applied in 2013, we would hope mitigating any increase will be at the forefront of the of the  International Group’s mind when negotiating with their reinsurance underwriters especially as the shipping community continue to face economic headwinds.”

Schnorr, added “Aon’s Marine team has extensive experience in the P&I market and understand the challenges our clients are facing. With a recovery unlikely for this year, it continues to be crucial that we engage closely with our clients to ensure they have access to the best solutions available.”

The full report can be downloaded here .

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About Aon
Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 65,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon’s global partnership and shirt sponsorship with Manchester United.

For further information: Ahmed Gawad +44 (0) 207 086 4014 ahmed.gawad@aon.co.uk
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