In negotiations with reinsurers, the P&I Clubs were able to achieve premium advantages that benefit all types of ships, especially passenger ships.
For the first time in years, the rise in the cost of marine liability insurance (P&I) has been curbed by reduced reinsurance premiums. As the International Group of P&I Clubs announced in London, the joint reinsurance program (GXL) of the twelve clubs for 2024/25 was agreed at lower prices than in the previous year. [ds_preview]
The cost reductions will be passed on to all insured ships. Passenger ships and crude oil tankers will benefit the most with discounts of -12.5% and -7.5% on reinsurance rates. The rate for clean products tankers fell by -1.7%, for conventional dry cargo ships and bulkers by -2.1% and for container ships by -1.0%.
Reinsurance is part of the overall P&I premium
Reinsurance rates account for a significant proportion of the total P&I premium, depending on the size of the ship. The discounts will at least partially offset the net premium increases announced by the P&I Clubs of between +5% and +7% as of February 20.
Mike Hall, Chairman of the Reinsurance Committee of the International Group, describes the conclusion as a “positive result” for the shipping companies. Despite the wars in Ukraine and the Gaza Strip and other geopolitical conflicts with an impact on shipping, the industry and the P&I insurers succeeded in reducing losses. Major losses in particular have fallen sharply in the last two years, meaning that reinsurers have hardly had to make any more claims.
The joint GXL of the P&I Clubs covers losses of up to USD 3 billion, making it one of the largest reinsurance contracts in the world. The consortium for the cover is led by the French company AXA XL. (mph)
