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FIXED PREMIUM P&I In association with Coastal Marine Services
Living in the shadow of the Clubs David Tiney (left) and John Hearn (below) of London-based underwriting agency Coastal Marine Services provide an insight to Fixed Premium P&I. They explain that there are other P&I avenues beyond the Clubs and now may be the time to explore options. Over the years we’ve heard Fixed Premium P&I (FP) referred to as many things, mostly unkind. “The little brother you can’t get shot of”, “an ich that you can’t scratch” and our personal favourite, “small fry P&I”. We can’t remember who these terms are attributable to but they’ve stuck in the memory and in some respects sums up how FP has been perceived over the years. Thankfully The Marine Insurer P&I Special Edition | July 2020
times have changed but there’s still much to do in the struggle to give FP the recognition it deserves. For as long as we can remember the Clubs have held court where P&I is concerned and they’ve done a tremendous job insuring ships of all shapes and sizes. Collectively they cover over 90% of the worlds ocean going fleet, which is not to be sniffed at. A relative newcomer by comparison to the Clubs, FP gate crashed the party around 30 years ago. From very humble beginnings it created a niche that proved so successful, many Clubs have now sought to establish their own FP facilities. At the time of writing, we suspect that in excess of 40,000 vessels are insured for P&I risks on a FP basis, yet rarely is this subject highlighted. Many brokers produce annual P&I reports, but very few feel that FP warrants a mention, notwithstanding a gross written premium running in to $100’s of millions each year. Likewise, the trade press usually overlooks the role that FP plays in the industry and we’re thankful to The Marine Insurer for identifying its importance and giving it a voice.
WHAT’S ON OFFER? But why is FP always in the shadow of the Clubs? Let’s take a close look at what’s on offer. In fact, FP is not too dissimilar to the Clubs, particularly when it comes to diversification.
