Marine insurance rates expected to rise 7.5% in 2014: Report
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Shipowners can expect premium rate hikes averaging about 7.5% this year, with increases in the range of 2.5% to 12.5%, says Tysers & Co. Ltd., an independent Lloyd's of London broker, in a report issued Monday.
The report states that general increases last year varied from 5% to 16.5%, with 7.5% being “the most popular figure.”
“The 2013 renewal was one of the most difficult ever, with the (P&I) clubs' perceived need for premium rises conflicting violently with shipowners' desperate need to cut costs,” says the report.
“We fear that the majority of clubs will for 2014 seek to argue that similar increases to last year are required on the basis that investment returns will be lower and combined ratios are generally over 100% due to the continued effect of churn and the increasing cost of casualties.”
The report says, in addition to expecting an average of 7.5% in rate hikes, “there will inevitably be another substantial increase in reinsurance costs as the Costa Concordia reserve has risen from $684 million last year to around $1.2 billion, the first (protection and indemnity) claim ever to hit the reinsurance layer excess $1 billion.”
“The P&I Report 2013” also discusses international group issues, including piracy and sanctions, and provides information on each protection and indemnity club and its finances.
Copies of the report are available here.
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