Annual P&I renewals throw up few surprises
Jon Guy, insurance correspondent | 20 February 2018
No surprises in this year’s P&I renewals. Credit: IHS Markit
The world’s shipowners have renewed their P&I insurance cover and there has been little to rock the boat.
Brokers say the lack of major losses, coupled with rules that prohibit existing tonnage being moving from one member of the International Group of P&I Clubs to another for a lower premium have seen many owners sticking with what they know.
However, there has been limited movement as owners that have reduced the size of their fleets looked to reduce the number of clubs they participate in.
One leading P&I broker told Fairplay, “There has been little real news this renewal. The only real shock has been the departure from the West of England Club of an owner that has been with them for many years. The reasons are unclear, but it has been the only real shock.
“It is not to say that the discussions have been straightforward. Owners have been looking for reductions and the clubs have been taking a pragmatic approach if the owners have a good claims record.”
However, broker Aon publicly stated that it was concerned by the efforts by some brokers to lure owners from existing brokers by promising price reductions that were simply unachievable.
“One aspect that has crept into our business is the cavalier approach taken by some,” said the broker. “Aon is no different to others in vigorously challenging all clubs to seek the very best terms. Our growing client base bears testament to this strategy.
“A large part of that success depends upon managing expectations. Our vast experience means we can be confident about what is and isn’t achievable for our clients. Too often we see wild claims about delivering huge savings, which simply aren’t possible. While this is quite rightly seen as mostly gimmickry, it can have a destabilising effect where operators are left uncertain as to what the marketplace can offer.
“At Aon, we push every boundary as far as we can and when we promise, we deliver.”
Underwriters said the conversations had, on the whole, been realistic, but this year’s renewals have seen some owners trying to test the nerve of the club.
“The only real issue we have seen this year is some owners looking to delay their decision to the eleventh hour in an effort to squeeze greater concessions form the clubs. While the rules mean they cannot move existing tonnage for a cheaper price they have been looking to leverage the potential home for new tonnage when it comes into services as a bargaining tool.”