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Member, Beacon International Group, Ltd.
LONDONHigher pool claims in 2006 meant protection and indemnity clubs were not willing to budge much on premium hikes at recent renewals, according to a renewal update by Aon PLF.
Aon PLF, a unit of London-based Aon Ltd., called shipowners' recent renewals "protracted and fiercely negotiated" and said there was "widespread inflexibility" among the P&I clubs regarding renewals. The clubs were reacting partly to pool claims that reached $182 million in the first nine months of last year, Aon said in the update.Aon was particularly miffed by the way passenger ship owners were treated. Mr. Hawke referred to the "last minute introduction of a limit on passenger liability, and, to insert a vengeful knife into an unsuspecting innocent, the mugging of the passenger sector into paying a 70% increase in their reinsurance tariff. Many owners in the passenger sector had found themselves having agreed their renewal terms, subject to reinsurance tariff, to find that the modest increase they had accepted was dwarfed by a reinsurance cost advised only three weeks before renewal."Overall, premiums for the market were up 6.48%, which was 96% of the 6.73% rate increase that clubs targeted for their renewals, according to Aon. That represents a much smaller discount than the one provided at last year's renewal, the broker noted. "The 2007 renewal will be remembered as being slow to deliver, with owners and their brokers returning time and again to underwriters who were bound by the shackles of losses," said Stephen Hawke, executive director of Aon Marine and chairman of Aon PLF, in a statement. "The key question, as always, is to what extent was underwriting discipline maintained?"