The 13 leading mutual protection and indemnity insurers are continuing to grow strongly in the fixed premium market for owned ships.
Excluding charterers’ cover, the market mainly focuses on fixed-price cover for specialist and small ships placed on a non-mutual basis.
Figures from broker Tysers estimates the combined fixed premium business of the members of the International Group of P&I Clubs amounts to around $157m in total.
The broker, who is positive about the growth of P&I clubs in the fixed premium market, recently commented: “Our advice remains unaltered: if you need fixed premium cover look first to the clubs who are keen to expand in this area, then British Marine and the managing general agents (MGA) run by club managers. If you have still had no luck, go to Amlin and the MGA facilities.”
P&I clubs have an advantage in the market because they have established and well-renowned claims handling teams in place. They can also source capital to cover the risk from their own financial reserves rather than fully rely on the reinsurance markets.
The leading fixed premium provider among the P&I clubs is the Shipowners’ Club, with an estimated annual premium of $87m. Shipowners’ is a P&I mutual that specialises in the small and specialist ship market.
Thomas Miller, managers of the UK P&I Club, has been active in acquiring fixed premium providers over recent years, recently adding Navigators, Hanseatic, Osprey and, most recently, Lodestar.
Tysers estimates Thomas Miller Specialty, which runs its fixed premium businesses, now has a combined fixed premium income of $43m.
The North of England P&I Club entered into the fixed premium market through its subsidiary company Sunderland Marine in September 2019 and has built a fixed premium book of more than $3m.
The West of England has also been expanding its fixed premium business as part of its diversification strategy. Tysers estimates it is generating around $9m of premium annually.
Eagle Ocean Marine is the fixed premium subsidiary of the American Club and it is one of the largest fixed premium facilities among the International Group members with annual income now standing at $14.8m.
The London P&I Club estimates its fixed premium income is around $12m annually.
The leading provider of non-P&I club fixed premium cover is British Marine with an income of $98m and Amlin with $36m.
Owned P&I cover is different from charterers' cover which is also provided on a fixed premium basis.
