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MARINE | P&I In association with Marsh
A community divided
Mark Cracknell, Head of P&I, Marsh Specialty provides a 2021 post-renewal market update on the P&I market and finds an interesting and perhaps long-term division in approach.
Following the February 2021 protection and indemnity (P&I) renewal, announcements by the International Group (IG) and P&I clubs were not as uniformly positive as in previous years. In the past, it was common to see all the P&I clubs claim an increase in business when reporting their renewal outcome, even though the renewal for the market as a whole is by definition a zero-sum game. Organic year-on-year growth on the back of a surging world fleet would explain many cases. But, the overall tone of nearly half of the commentary published by the clubs this year was less upbeat than in previous years. This raises the possibility that the market is now, or will soon be, bifurcated. While some clubs reported growth in membership at renewal, a significant number reported no growth or a reduction in entered tonnage (see graphic on p15). Some highlights for those reporting growth include: > Gard’s mutual entered tonnage reached a record 246 million gross tonnes (GT) and Gard reported a renewal rate of 99.4%. The Marine Insurer Americas Edition | June 2021
Gard also said its owners general discount (OGD) will be payable in 2021 at a rate of 5% of renewing premium; > Britannia added 2.6 million GT during the 2020 policy year and then doubled that tally at the renewal itself; > Skuld crossed the 100 million GT owned tonnage threshold at the renewal, booking an increase of 5.5%; > Steamship Mutual added 5.8 million GT, taking total owned entered tonnage above 96 million GT. At the same time, the club reported achieving an overall premium increase close to the club’s published general increase of 5%; and, > Among the smaller clubs, The Swedish Club reported an increase in owned entered tonnage of more than 10%, to 56 million GT. Gard’s considerable financial and physical resources have a strong appeal as the club continues to consolidate its position as the market powerhouse. Britannia has one the strongest balance sheets of all the clubs in relative terms. Recent history notwithstanding, Skuld has the best long-term published underwriting result
