A report from A.M. Best Co. Inc. states the obvious after concluding that P&I clubs struggling with soaring claims are likely to increase call levels as they change their underwriting approaches.
Members of the International Group of P&I Clubs have collectively failed to make a technical profit in any financial year since 1999 despite large increases in call levels. Many Clubs have adopted more forward-looking approaches to pricing and those changes are likely to result in further increases in calls. The clubs are expected to rely less on investment income to produce surplus as equity markets have become volatile. High-value claims have had a big impact on the clubs’ underwriting results but it is unclear whether recent large claims mark the beginning of a long-term trend.
The report is free to BestWeek subscribers at http://www.bestweek.com/. Nonsubscribers can download it for $55.