The International Group of P&I Clubs has set up a separate section for containership claims under its collective reinsurance scheme.
The International Group’s 13 members share reinsurance costs for protection and indemnity claims over $10m, with those costing more than $100m covered by the commercial reinsurance market.
As part of an annual review of its reinsurance terms, the International Group has redrawn its categories.
Reflecting recent claims, fully cellular containerships have been removed from the dry cargo section and are now a stand-alone group.
Mike Hall, the International Group’s reinsurance subcommittee chairman, said: “The introduction of a fifth category of vessel type and modest rate changes applied as a consequence, allow the rate charged to each type of vessel to continue to fairly reflect the loss experience that they have brought to the Group’s reinsurance arrangements.”
Containership casualties, usually the result of fires or collapsed container stacks, have been a major drain on P&I club resources and the International Group’s reinsurance scheme over recent years.
The risk exposure to P&I clubs has increased with the growth of the ultra-large containership fleet.
A fire on the 15,000-teu Maersk Honam (built 2017) in 2018 was the largest claim experienced in the sector. But the International Group’s reinsurance scheme faces another potentially huge claim from the loss of the equivalent of 4,500 teu from the 14,000-teu boxship ONE Apus (built 2019) earlier this month.
The International Group has also just renegotiated the terms of the collective overspill portion of its reinsurance programme which covers claims in excess of $2.1bn.
Despite a hardening reinsurance market the International Group said it had achieved terms “only slightly above expiring rates for shipowners”. It also pointed out that the new reinsurance terms will not include any Covid-19 exclusions.
The most significant and costliest part of the International Group's reinsurance scheme, between $100m and $2.1bn, is not up for renewal until 2022.
