Willis Group Holdings has released its Marine Protection & Indemnity (P&I) Market Review for 2007/2008. Willis noted that the “annual report provides a succinct overview of the P&I marketplace and explores the themes witnessed over the past year and what key drivers may affect individual operators throughout the coming months in this constantly evolving arena.”
The “key findings” contained in the report were listed as follows:
— Highest ever level of outstanding claims in the 2006/07 policy year and in turn the worst Underwriting results ever experienced by the market.
— Investment income high, so acting as a counter-balance to the underwriting results.
— These conditions have resulted in a paradox, whereby the market is stronger than it has ever been before in terms of asset base, but facing probably the worst ever underlying underwriting trends.
— Worst ever year for Pool claims – the leap in the cost of large claims will have an inevitable impact on P&I ratings.
— The increase in average size of individual large claims suggests that 2006/07 will not be a one-off.
— Claims levels are not uniformly adverse across all owners. Due to the volatility of large losses very adverse records are concentrated on a minority of operators.
Ben Abraham, Head of Willis P&I commented: “The unprecedented level of claims in the 2006/07 year has been the defining feature of the P&I market over the past year. In particular, the worst ever Pool claims cost result for the market has been one of the key discussion points in the lead up to the renewal in February 2008.”
Source: Willis Group Holdings – www.willis.com.
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