The International Group of P&I Clubs (IG) has secured a 7.5% rate reduction on the first layer of its reinsurance tower, reports Insurance Insider.
Group Clubs are liable for their own losses up to $10m, and the 12 International Group Clubs operate a Pool from $10m to $100m.
Above that is Reinsurance Layer 1, from $100m to $750m. There are three multi-year private placements (one for 5% and two for 10%). The commercial market share is 75%.
The full reinsurance tower rises to $3.1bn for certain losses.
At the 2022 renewal annual aggregate limits were introduced for the excess layers in response to the market-wide coverage restrictions with respect to Malicious Cyber, Covid-19 and other new Pandemic risks.
These aggregate limits remained in place for the excess layers for the 2023/24 policy year, but now only apply to losses with a value greater than $750m (2022/23: losses greater than $550m) directly arising from these Risks. All other claims continued to be covered on a free and unlimited basis within all layers of the GXL. Losses below $750m are covered by the reinsurance on a free and unlimited basis whether or not the loss is caused by one of the defined Risks.
The International Group tends to state publicly in mid-December its complete reinsurance renewal costs, along with any structural changes. However, the reduction of 7.5% for this layer would confirm market reports that the Group was benefiting from low levels of claims in the past 12 months, and an increase in available capacity within the commercial market, which has been hardening for a few years.