Press Release Summary: The 2007 P&I renewal season concludes today, after what was a more protracted process than many commentators were predicting. Although the P&I clubs' advertised General Increases were in the single digit range - marking the lowest level for seven years - the renewal proved remarkably tough with most clubs sticking resolutely to their renewal requirements.
Press Release Body: The 2007 P&I renewal season concludes today, after what was a more protracted process than many commentators were predicting. Although the P&I clubs' advertised General Increases were in the single digit range - marking the lowest level for seven years - the renewal proved remarkably tough with most clubs sticking resolutely to their renewal requirements.
The key factors behind this inflexible attitude are:
* levels of Pool claims (individual claims between US$6-50 million) for 2006 are at a record high in comparison to previous years and even outstripped the annus horribilis of 2004 * requirements of future solvency regime Solvency II, while undefined and still subject to revision, are making clubs prudent in ensuring that the existing level of free reserves is not diluted.
There has been some evidence of clubs working rigorously to a renewal budget, giving little flexibility to underwriters who worked within highly rigid parameters. However, we have seen some aggressive approaches from clubs eager to gain market share in developing regions and some rating tolerance for changes in terms and conditions.
The passenger sector was hit separately by the double whammy of a reduction in cover for passenger liability coupled with a massive increase in the reinsurance tariff, ostensibly to anticipate future Athens Convention liability limit increases. The passenger community is querying why the cost of their catastrophe cover should be hiked to anticipate, an as yet unratified convention change which will impact, if at all, on the attritional and thus club retention level.
The very lateness of the announcement of the reinsurance tariffs was an additional injustice for a sector that has an unblemished record on the reinsurance contract in recent years. This left operators with less than a month to take on board the changes and budget for the 70% increase in their reinsurance tariff.
The good news for the non-passenger sectors was that the reinsurance tariff renewal was neutral or even slightly decreased.
It is too early to accurately estimate the net premium increase across the market as a whole, suffice to say that net premiums will have risen, probably in the range of 5 to 7.5%.href=\"http://www.privateclients.aon.co.uk/privateclients/microsites/cars/classic.aspx\">classic car insurance
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2012
