Tagged: P&I, underwriting

Back in April we wrote that shipowners should consider their P&I club’s investment portfolio carefully; the recession has resulted in falling equity markets and therefore lower investment incomes for P&I Clubs who invested heavily in the markets. The result of this meant we were likely to see a more technical approach to underwriting and rising premiums for shipowners.

Last month, the Japan Club submitted its year end results meaning that all International Group cartel members have now reported, and the group has made a combined loss of USD318m even after cash calls of USD545m by six of the clubs.

The underlying loss totals USD964m, which is almost exactly the USD953m loss that clubs incurred on their investment portfolios.

Since renewal, there has of course been some recovery in the markets, so any losses that were market write-downs may now be seeing a reversal. It is estimated that general increases may have contributed another USD500m to club incomes for the current year.

Whilst the underwriting results are comparable to the previous year, the key difference is the lack of investment profit, which last year meant the group was able break even but this year has resulted in substantial losses

 Print This Post