For the fourth consecutive year, the International Group of Protection & Indemnity Clubs has secured reinsurance renewal premium reductions on the Group programme, after finalising its 2018/2019 General Excess of Loss (GXL) reinsurance contract and the Hydra reinsurance programmes.
The Group has announced that in spite of uncertainty in the global insurance and reinsurance market after an extremely high level of catastrophe losses in the second-half of 2017, it’s been able to advance its traditional renewal timetable by roughly one month, with the assistance of its programme leader and panel of reinsurers.
Furthermore, the 2018/2019 agreement represents the fourth consecutive year of renewal premium reductions on the Group programme, which, the firm says is a positive for the Group and its Members in light of the impacts of third and fourth-quarter catastrophe losses.
When compared with 2017, the Group secured reduced rates per gross tonnage (GT) across all categories, with the greatest reductions occurring in both the dirty tankers and dry cargo vessels tonnage categories, which saw reductions of -1.85%.
The passenger vessels category witnessed a change of -1.84% when compared with 2017, while clean tankers, chart tankers and the chart dries categories all saw year-on-year reductions of -1.83%.
The individual club retention remains unchanged for the 2018/2019 year, at $10 million. While the attachment point on the Group GXL reinsurance contract also remains unchanged for the 2018/2019 policy year, at $100 million.
However, the Group has revealed the approval of some structural changes to the pool. This includes the lower pool layer ceiling/upper pool attachment point being lifted from $45 million to $50 million, and the layer from $80 million to the GXL attachment point will be absorbed into the pool, merge with the upper layer which will attach from $50 million to $100 million, with an individual club retention of 7.5% across the layer, effective February 20th, 2018.
Under the current programme, Hydra reinsures 100% of the $80 million to $100 million layer. However, under the new pool structure, and effective February 20th 2018, Hydra will reinsure 92.5% of this layer, with the rest being retained within the individual club retention, as noted above.
For the 2018/2019 programme Hydra will continue to reinsure 30% of the first layer of the GXL, as with previous years.
Furthermore, the Group explains that its three multi-year private placements covering both layers of the Group GXL contract will also remain in place for the 2018/2019 policy year. And, the market reinsurance cover, which came into effect from January 18th, 2017, will be renewed for another 12 months with a higher limit of $200 million, which will be included in the overall reinsurance cost.
