The International Group of P&I Clubs reinsures 90% of the world’s ocean-going tonnage through a single Bermuda-based entity. The structure behind this arrangement shows how captive reinsurance can reduce dependence on the commercial market.
Tawana Tannock, managing director of the Skuld Bermuda companies, laid out the mechanics at the Bermuda Captive Conference last week.
Reporting on her remarks, the Royal Gazette noted that Skuld operates within the International Group of P&I Clubs. The group’s 12 member clubs pool their risks through Hydra Insurance Company Ltd.
Hydra is a Bermuda-incorporated segregated account captive. Tannock serves as president of its board. Each club holds its own segregated account, ring-fencing its assets and liabilities. The arrangement allows clubs to retain premiums that would otherwise flow to commercial reinsurers.
“We at Skuld are part of one entity in Bermuda that reinsures 90% of the world’s ocean-going tonnage,” Tannock said.
The clubs use Hydra to bring in-house the lines where commercial reinsurance pricing is hardest to justify.
“We realised that one of the ways we could utilise not only the Skuld structure, but also the Hydra structure, was to look at what’s really expensive in the reinsurance market and retain that risk,” Tannock said.
The pressure on that market is significant. Reinsurance costs across the P&I sector now exceed $1 billion in annual premium, according to a Gallagher report from November 2025.
Two major pool claims – the Dali and X-Press Pearl – are expected to produce P&I losses exceeding $1 billion. This dynamic is pushing rate pressure further into the 2026 renewal cycle.
One line Skuld writes through the Bermuda structure is crew coverage under the Maritime Labour Convention. The convention requires shipowners to guarantee compensation for seafarer repatriation, outstanding wages, and long-term disability or death.
The Strait of Hormuz closure this year has left many ships stranded. This has put that coverage under acute pressure.
“We write that business in Bermuda because it’s cheaper than writing it on the open market,” Tannock said. “This is one of the things Bermuda has been useful for as we keep evolving.”
The scale of that pressure is visible in the war risk market. Premiums for Hormuz transits surged fivefold within 48 hours of the February 2026 US-Israeli strikes on Iran.
Tanker traffic collapsed more than 80% before Iran’s physical blockade was formally declared. A ceasefire has not normalized conditions. Underwriters say the strait remains a high-risk corridor.
Skuld’s Bermuda operation dates to 1978, established the same year the Insurance Act came into force. Cold War contingency planning drove that original decision.
Economic substance rules later pushed Skuld to deepen its local presence. The captive model has proven more adaptive than the commercial market when geopolitical conditions shift. The current crisis is adding weight to that argument.
