Gallagher’s P&I team has compiled an update and Q&A that offers our specialist views on how to navigate the current renewal period and hardening market cycle. This week IMN is reporting the answers of its senior executives to key renewal-related questions.
William Baynham, Divisional Director – Gallagher Marine P&I – was asked: “The impact of Pool claims and large retained claims has been well publicized, but how are you seeing this impact on renewal discussions?”
Baynham noted that at the mid-2020 policy year mark, Pool claims were running at historically high levels, “and sadly the picture has not brightened much since that time”.
Similarly high-value claims within the individual Club retentions ($10m) remained a notable feature of the claims environment. Baynham observed that there had been much commentary on these losses and associated Club exposures to the Pool, and they have been referred to in numerous pre-renewal announcements from the Group Clubs. They had been cited as lead considerations when setting General Increases. Baynham observed that those Clubs without GIs were not immune to these losses either. He said that, through Gallagher’s discussions thus far, it was clear these pressures played their part as these Clubs would have set their internal renewal targets.
However, Baynham said that what had been less vocalized was the impact of rising Pool contributions on member records. “Clearly these costs are a function of the Group system, but for many it is the first time these costs have had such a significant bearing on individual member records and performances”.
At a time where cash back or multi-year deals that were pegged to loss ratio triggers were prevalent in the market, the significance was only heightened. “Never has it been more important to engage with professionals who truly understand the breakdown of Clubs overheads and costs, particularly at a time of such fluctuation”, Baynham concluded.