Experts predict that marine insurance rates will increase by an average of 7.5 percent in 2014, a number similar to increases seen in the industry last year. This prediction, along with other information about the industry, was published in a report by independent broker Tysers & Co. Ltd.
The report stated that shippers should see an insurance increase between 2.5 percent and 12.5 percent. In 2013, the marine industry saw an insurance increase between 5 percent and 16.5 percent. The publication also predicts that reinsurance rates will rise substantially this year.
The report continued: “We fear that the majority of clubs will for 2014 seek to argue that similar increases to last year are required on the basis that investment returns will be lower and combined ratios are generally over 100% due to the continued effect of churn and the increasing cost of casualties.”
Tysers outlines the following issues affecting the P&I market:
- The rising cost of administration, especially in the areas of information technology and regulation compliance.
- The perceived importance of an A rating.
- Clubs feeling pressure to hold large free reserves due to regulations.
- Increasing reinsurance costs.
- Increasing claim values—especially when it comes to serious casualties.
Marine insurance law can be confusing and complex. If you need to file a claim, or if you believe your claim is being delayed or undervalued, you may wish to speak with a marine insurance attorney. At the Voss Law Firm, we encourage those in the shipping industry to take advantage of our free, private introductory consultations. Call today to schedule: 888-614-7730.