Finance and Insurance

Shipowners will have to digest double-digit rises in P&I rates next year

Shipowners have received confirmation that next year will be an expensive one in terms of cover for their vessels.

The UK P&I Club has set a general increase of 12.5% on all mutual premium rates for the 2022 renewal in order, it said in a release, to correct its underwriting deficit. Members with adverse records should anticipate higher increases, the club added.

Earlier this month the West of England P&I Club became the first club to indicate its 2022 plans, calling for a 15% hike in rates. Double digit rises are far above a normal annual raise, typically a 5% increase would be considered a large call in years gone by.

“Record pool costs and Covid-19 related liabilities mean that a corrective action is now necessary,” the West stated in a note to clients earlier this month.

Also spooking owners; the London Club came out this month with a supplementary call for members covering the last three years. The additional hike works at 25% over original budgets with the struggling insurance firm citing the “acute softness” in rating levels in the P&I sector as well as the high level of claims this year and an increase in the cost of claims involving Covid-19 as reasons for the additional hikes.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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