With an average premium increase of 5.8% for shipowners, The International Group (IG) has finalised its core P&I reinsurance contract for the 2023–2024 policy year, as reported by Insurance Insider.
Passenger risks
With clean tankers and FCC experiencing a 10.5% rate hike, the greatest increase of all lines, while passenger risks were renewed flat, the rates charged to shipowners differ by vessel type.
The $3.1 billion initiative, which was renewed by a similar margin, continues to be led by Axa XL, as this newspaper reported the previous year.
In accordance with the exclusionary language used by reinsurers for main war P&I coverage, IG also renewed its war P&I coverage for the upcoming policy year but had to implement geographical exclusion wording for vessels in Russian and Ukrainian waters.
Sub-limited insurance
The IG is presently negotiating the availability of sub-limited insurance for impacted boats, however, it is probable that this coverage will be based on a per-vessel cap that is far lower than the primary excess war placement cap of $500mn. The IG stated that it would soon publish information about this coverage.
The IG, on the other hand, claimed to have enhanced open market coverage for Covid-19, malicious cyber, and pandemic risks, which is now free and unrestricted up to $650mn in excess $100mn, with an additional $1.35bn of aggregate cover for these risks in its upper reinsurance levels.
Individual club members have maintained a $10 million retention, while the pooled retention is still $100 million higher than $10 million.
Market placement
The first layer of the scheme costs $650 million more than $100 million, the second layer costs 750 million more than $750 million, and the third and last layer costs $600 million more than $1.5 billion.
In order to replace multi-year private placements that were reduced, IG boosted the open market placement of its first layer from 70% to 75%.
One of the IG’s two 10% multi-year placements that were about to expire for its first layer was renewed, and the other 10% private placement was replaced with a 5% line.
The annual aggregate deductible (AAD) for layer one is still the same amount as last year’s coverage under the IG’s Bermuda captive Hydra.
The value of the AAD climbed to $107.1mn for the policy year 2023–24 as a result of the increase in order for the open market layer to 75%.
Mike Hall, the head of the IG’s reinsurance committee, declared: “I am glad to announce a very favourable renewal for shipowners in 2023, despite adverse global reinsurance market conditions.”
Despite the difficulties posed by the Russia/Ukraine crisis and without suffering a substantial negative impact on the…position, the IG has demonstrated its ability to weather the COVID-19 epidemic.
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Source: Insurance Insider
