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North P&I Club will not raise premiums in 2019

North P&I Club will not raise premiums in 2019 | Insurance Business UK

North P&I Club will not raise premiums in 2019

The North P&I Club, amid challenging trading conditions, is the bearer of good news for its members.

For the third year in a row, the marine insurer’s directors are not raising premiums for protection and indemnity (P&I) cover as well as freight demurrage and defence (FD&D) cover at the February 2019 renewal.  

“Shipowners around the world are already grappling with increasing regulatory costs, political uncertainty with concerns around the impact of Brexit, and disruption to worldwide trade from international protectionism,” cited chair Pratap Shirke. “This, therefore, continues our support for members while managing the Club in a responsible way.”

Shirke, while acknowledging the continuing trend of premium erosion, said the move not to declare increases at next year’s renewal is in recognition of the prevailing economic difficulties being faced by members. Corrective action, however, will eventually be needed not only to address the premium erosion but also to stop the decline in capital.

“The directors decided not to announce an increase to mutual and fixed premiums at the February 2019 renewal,” noted chief executive Paul Jennings. “Managers will, however, be undertaking a significant exercise to review all members’ premiums and terms in order to ensure that declining rates of premium are halted and equitably adjusted to properly reflect performance and exposure going forward.

“This exercise will be robustly undertaken to avoid the need for greater premium increases in subsequent years. Members with adverse loss records will of course have their rates and terms adjusted accordingly in order to ensure that they make an equitable contribution.” 

Meanwhile the Club’s directors, according to the CEO, are satisfied that North remains in strong financial health. Jennings said they are confident that the insurer’s 2019 renewal strategy, allied with its “disciplined financial approach and prudent underwriting philosophy, will position the Club appropriately to meet the oncoming challenges of a ‘hardening’ insurance market.”