The International Group of P&I Clubs has completed its pooling and GXL reinsurance contract structure for 2023/24, securing coverage with only a “small increase in rates” for shipowners, despite challenging market conditions.
To date, the IG has seen a benign pool claims environment for its 2022/23 program, but it notes that reinsurance partners have been impacted by both Hurricane Ian and the Russia/Ukraine war.
As part of its GXL program, the IG renewed one of its two expiring 10% multi-year private placements (which provide cover in the layer $650m xs $100m) whilst replacing the other expiring 10% private placement with a 5% line.
This in turn means that there is an increased, 75%, share of the GXL for the open market.
Within that 75%, IG reports that coverage for COVID-19, malicious cyber and pandemic risks has been expanded and is now free and unlimited for all claims up to $650m xs $100m, with aggregated cover above $750m.
IG also disclosed that the main GXL placement (layers 1-3, $2 billion excess of $100m) has returned to three layers, as was the position for the 2020 and 2021 renewals.
Additionally, there continues to be a $1 billion collective overspill excess of the GXL together with three private placements in layer 1, although with a reduced 25% share.
The retention level for individual clubs remains at $10 million, and pooling remains up to $100 million excess of $10 million, with the overall average rate rise for shipowners being 5.8%.
“Despite challenging general reinsurance market conditions, I am delighted to announce a very positive renewal for shipowners in 2023,” said Mike Hall, Chairman of the IG’s Reinsurance Committee. “The IG has shown that it has been able to weather the COVID-19 pandemic without a significant adverse impact to the GXL placement and despite the challenges presented by the Russia/Ukraine conflict,” he continued.
“The excellent communication between the IG and the GXL leader, AXA XL, as well as with the IG’s many longstanding reinsurance partners has helped all parties understand the importance of and unique nature of the IG’s coverage requirements in support of the global shipping community. I am therefore grateful to them and to the IG’s brokers for their continued support in finalising this year’s reinsurance programme.”