P&I club claims climb

International

It seems as if total claims costs in 2007 for the marine liability mutuals, the protection and indemnity (P&I) clubs, are likely to equal, and probably exceed, the amounts paid out by the clubs for losses incurred in 2006, by far the worst year on record for the P&I sector. Indeed, according to HSBC Insurance Brokers P&I Report 2008, the numbers of pool claims and the value of total claims to date, 2007 is already running ahead of the figures recorded at the corresponding time last year. For HSBC, the year 2006 marked a fundamental shift in claims experience for the Clubs and Nick Riddle, executive director, Global Marine practice at HSBC, warns that the picture is as likely to deteriorate still further as it is to improve. Mr Riddle says that there are no factors to indicate that 2006 and 2007 will be anything other than similar. He also notes that the random nature of these catastrophic losses leaves the clubs with a dilemma in that the big claims are by no means confined to ship owners with fleets that are in less than perfect condition. “On the contrary, such claims are more often than not attributable to shipping companies that would be welcomed with open arms if they were in the market for a new club,” Mr Riddle says.