The International Group Pooling and GXL Reinsurance contract for 2022 has now been finalised, with the Group agreeing to pay more in premiums to secure the renewal of its 2022 reinsurance programme.
The increase in reinsurance spend comes amid hardening market conditions and the deterioration in the Group’s claims record with its reinsurance partners.
This renewal followed a two year contract on the Group’s main General Excess of Loss (GXL) placement, which was $2 billion excess of $100 million.
Additionally, the Group was renewing its Collective Overspill programme ($1bn excess of $2.1bn) and one of the three 10% multi-year private placements that provide it with reinsurance protection in the layer $650 million excess $100 million.
Despite challenging market conditions and concerns in the market that malicious cyber, COVID-19 and future pandemics represented systemic risks, the Group says it has worked collectively with its reinsurance partners to secure a programme that enables it to offer “uniquely high levels of free and unlimited coverage for all risks.”
However, the Group has had to make some adjustments to its GXL placement in order to achieve this.
The main GXL placement ($2bn excess $100mn, layer 1-3) has been split into four layers, with the Collective Overspill slice renewed excess of the GXL, while the three private placements also remain in place.
Additionally, as part of its annual analysis to ensure the fairness of cost allocation between different vessel types, the Reinsurance Committee has also considered its current vessel categories. As a result, the Group says that prices or different vessel categories have been adjusted accordingly.
Chairman of the International Group’s Reinsurance Committee, Mike Hall, said: “The Group’s decision to renew the majority of its programme for two years in 2020 provided our Members with the benefits of price stability and continuity of cover for those two years.
“However, during the intervening period a combination of hardening market conditions, a global pandemic, a number of coverage issues, plus a worsening claims record, have all resulted in the 2022 renewal being particularly challenging to negotiate.
“That said, our longstanding reinsurance partners have understood the unique nature of the Group’s coverage requirements, in support of the global shipping community, and we are grateful to them and the Group’s brokers for their continued support in finalising this year’s reinsurance programme.”
