Global: Rate rises staying sizeable for 2023 P&I renewal
Source: Middle East Insurance Review | Nov 2022
The 2022-2023 policy year has seen a dramatic shift in the P&I clubs’ underwriting performance, according to S&P Global Ratings. Following three years of elevated pool claims, at the end of September 2022 no new pool claims have been notified for the policy year.
The S&P report ‘Rate Rises To Stay Sizable For 2023 P&I Renewal Despite Better Half-Year Underwriting Results’ said that many clubs have recorded their best half-year results for five years. However, losses on the investment side because of turbulence in the bond and equity markets mean most will record bottom-line losses at year-end. “We expect that some clubs’ capital adequacy will have suffered as a result,” the report said.
Clubs that follow the practice of making general increases will likely announce an average 7% increase in rates for the policy year 2023-2024, driven both by inflation and a need to improve technical pricing levels.
The report noted that the clubs will find it challenging to achieve this rate because discussions with ship-owners will be tougher this year both as a result of the clubs’ improved underwriting performance and a return to more normal trading conditions in the shipping market following significant increases in freight rates last year. M