London 24 February 2004 - The Protection and Indemnity (P&I) renewal season for ship owners culminated in a last minute rush as owners looked to agree more favourable terms. With P&I Clubs' (the mutual system that underpins the provision of P&I insurances for the shipping world) general rate increases ranging from 0% to 20 %, many ship owners left making renewal decisions until the last moment before settling on rating and conditions for 2004. However, as with recent renewal seasons, the number of owners actually moving between Clubs was relatively small in relation to the market place as a whole, with less than 3% making a change.
P&I Clubs also enjoyed an overall boost in the levels of premium income generated. This ought to remove some of the volatility in rating seen over the last few renewals assuming that sporadic evidence of a rising claims pattern is a statistical oddity not a trend. However it is also clear that the premium increases across the Clubs as a whole were less than the originally advertised General Increases. This reflects some last minute "softening" in attitude from certain Clubs perhaps comforted by reports of unexpectedly high levels of investment income.
Stephen Hawke, Chairman of Aon's Global P&I Board, said: "Whilst the limited number of owners changing Clubs for their Protection and Indemnity (P&I) cover suggests a stable market place, the lateness of decision making meant many P&I Clubs were waiting for news right up until the renewal deadline.
"Most Clubs stuck rigidly to the underwriting parameters laid down by their ship owner boards, resulting in a boost to overall premium income of as much as 10-12.5%. Despite evidence of last minute weakening amongst certain Clubs, this additional premium is welcome news after the declining investment income, depleted reserves and technical underwriting deficits suffered by the P&I Clubs in past years and should point to lower levels of rate increases for ship owners in the near future" added Hawke.
For further information, please contact:
Sebastian St. John-Clarke
Aon Press Office
0207 505 7201
Sebastian.Clarke@aon.co.uk
Aon Marine
The Marine division of Aon Limited provides specialist assistance for clients in the identification, management and transfer of risk within the marine industry. Aons Marine division provides expertise in hull, liability, protection and indemnity (P&I), construction and cargo, and specie. With dedicated client teams, Aon Marine provides the highest level of personal focus on client needs and has the capability and size to access and influence worldwide insurance markets.
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