Ana sayfa Yazarlar Aret Taşcıyan “S O S signals in pandi renewals”

“S O S signals in pandi renewals”

The most recent Pandi renewals which we have just completed are poised to be the most challenging and damaging renewals in several decades. The difficult and devastating economic conditions for ship owners and poor underwriting results worsened by the largest claims in history proved this past renewal season one of the worst in history.
One of the major brokers noted in its annual PandI Market Report that in 2011/2012 the incurred claims increased by 13%, thus 2011/2012 policy year is attributed the honor of registering the highest level of net paid and incurred claims ever reported in PandI History .10 of The PandI Clubs reported underwriting losses with negative combined ratios which should not be sustainable in a mutual environment. In spite of all these adversities the total market free reserves were managed to increase marginally by 4%. The renewal negotiations were the toughest fought during my 37 years of carrier in this business and my seniors say that they were the toughest since the turn of The Century.
The shipowners have been facing the most challenging economic difficulties in a generation and PandI Clubs are having difficulties in balancing their underwriting results. Added to this the Reinsurance market have been introduced with the largest claims in IGA History so they aggravated the situation with huge premium increases in The Group Excess Reinsurances. The Clubs, in order to minimize their Reinsurance Costs increased the retention level from USD 8 Million to USD 9 Million and the Pool Retention level from USD 60 Million to USD 70 Million.
On the other hand, The Limits on The Club Cover generally remained unchanged. The limit for oil pollution claims will continue to be USD 1 Billion, the combined limit  for The Passenger and Seamen Liabilities will be USD 3 Billion with a sub limit of USD 2 Billion for Passenger Liabilities to apply. The Group overspill protection will again be in place for 2013 to protect the clubs for their share of any overspill liabilities for claims of up to USD 1 Billion in excess of USD 2.07 Billion.
The steady increase in The Gross Tonnage of the World’s Shipping increases the risk exposure of the PandI Clubs. However, because of the increasing volume and cost of the claims and the poor performance of the investment markets, the Clubs will not be able to improve their economic conditions. This dilemma unfortunately gives us alarm signals for further general increases for the forthcoming renewal season and maybe seasons.
I hereby urge and sincerely request those shipowners sitting on the Boards of The PandI Clubs that , not later than tomorrow, they should start working on the finances of The Clubs that they represent and look for the ways and means of utilizing their reserves a bit to cover at least part of  the forthcoming general increases in 2014. The shipping market will not be economically better at this time next year and there may not be that many shipowners and brokers left to sit around the table to negotiate the premium increases.
Time is tough  and this is not a jpke. Mr Pandi Clubs you can touch upon your reserves a bit, Don’t worry if this is done carefully it should not hurt your ratings and financial stability but will help be of great help for your shipowner  members.