Insurance broker Gallagher Specialty has urged protection and indemnity clubs to decentralise their underwriting authority to regional outposts.
Ahead of next year’s February renewal, divisional director Nick Roblin said there has been a trend for clubs to centralise underwriting decision making. He would like to see reversed for the benefit of shipowner clients.
His comments were made in a video discussion on the P&I market hosted by the new head of P&I, Alex Vullo, and uploaded to YouTube via the Gallagher website.
“Across the board, there has been a strengthening of underwriting decision making among the senior underwriting staff rather than allocated out to staff in each geographical region,” Roblin said.
“There has probably been a sense of loss of authority for underwriting staff on the shop floor. Whether that is desirable or not, I think there needs to be a reversion of that to real authority for each underwriter who is the client-facing individual and should be managing each and every renewal.”
Although 10 of the 12 members of the International Group of P&I Clubs are in Europe, their clients are spread worldwide, with the highest concentration in the Far East and Asia.
Roblin pointed out that the recently merged NorthStandard is increasing the regional autonomy of underwriting staff — a trend he would like to see followed.
Gallagher’s previous forecast of rate rises has proved accurate, with clubs announcing increases of between 5% and 7.5%. While three clubs have offered cash-back sweeteners to members, one club has been forced into a supplementary call after a deterioration of a prior claims year.
Vullo described the market as a “tale of two extremes”. He said rating levels are still inadequate, with clubs reporting an average 110% combined ratio over the past seven years when they need more like 105% or better.
He predicted “firm but predictable” single-digit rate rises for the next two years.
Gallagher’s video is a wide-ranging informal discussion of the market by its individual brokers who offer personal views on the clubs to watch.
It is intended to make the sector’s often complex issues easier to grasp and more accessible, rather than the weighty overviews presented in traditional P&I reports.