West P&I Club announces 15% general increase in response to market conditions
The Board of the West of England P&I Club has today announced a 15% general increase for mutual P&I and FD&D Members. This reflects another challenging year for the P&I industry, as record IG Pool claims and pandemic-related liabilities remain a persistent challenge.
The Pool continues at record levels in terms of the magnitude of claims and this trend shows no sign of abatement. At the six months position this year, the incurred cost of the Pool already exceeds that of the same position in 2020 which was itself a record high.
Covid-related liabilities continue to be higher than anticipated, especially with the advent of the Delta variant. The Club is continuing to provide dedicated advice and assistance to its Members to help them deal with the impacts of the pandemic on their operations, but vaccination will ultimately be the key and that will take time to make a full impact as global vaccination rates vary greatly.
As West has also said repeatedly, rates are generally too low and must increase to better equate premium with claims, especially where a low investment return environment means that investment returns will not support continued technical losses.
Strong action is therefore required to address this unique combination of negative impacts on the Clubs’ operating performance, which is why West is announcing today a 15% general increase for P&I and FD&D together with a rise in deductibles.
The forthcoming renewal will be robust and will involve some de-risking, meaning that tonnage which has repeatedly failed to contribute positively to the Club’s financial result will not be offered renewal.
Tom Bowsher, Group CEO, noted that: “Premium increases are never welcome but the continuing impact of a number of external factors on Clubs means corrective steps are unfortunately required. West is taking decisive action now to address the situation and our Members can be confident that we will continue to do whatever is necessary to safeguard the Club’s financial strength.”
Source: West of England P&I Club