Norway-based P&I Club Skuld has said that it will be firmer on renewals than in past years, although it has not declared a General Increase. Deductibles will rise for the 2020/21 policy year.
The announcement came after it was noted that, although the first six months of the 2019/20 policy year showed a small surplus, this was supported only by investment income. The mutual underwriting performance showed a combined ratio of 112%.
This was driven by an increased number of larger claims from members, an increasing level of attritional claims, and a notable increase in pool claims activity within the International Group of P&I clubs, Skuld said.
The Club emphasized that, after a soft market for premiums over a number of years, current premium rates had become unsustainable and did not adequately support either attritional or large claims exposures.
Skuld said that it would continue its commitment to focus on underwriting business that was sustainable in the short, medium and long term. It made plain that, given the level of volatility experienced in the global investment market, it would not be relying on investment returns to subsidize negative underwriting results.
The Board of the P&I Club therefore directed the managers to address adequately the challenging underwriting performance during the upcoming renewal negotiations. “Skuld has not adjusted premium levels for the mutual portfolio by General Increase for nearly 10 years now. That being said, Skuld does expect renewal discussions to be firmer on necessary rate adjustments than in previous years, given the overall performance of the mutual portfolio”, the Club said.
All deductibles below $25,000 will be increased by $2,500 and RDC/FFO deductibles will increase to $50,000.
The release call for Policy Year 2020/21 was set to 15% while previous years remain unchanged. The applicable release calls are: