The Protection & Indemnity (P&I) market will suffer higher reinsurance costs, more limited P&I war cover and significantly lower revenue from investment income in the year ahead, global insurance broker Willis has warned.
In its P&I Market Review for 2001/2002, Willis says world events, including the 11 September terrorist attacks on the US, have "overshadowed the underlying evolution and continuing change in the P&I market."
The broker points to a trend of consolidation and "strategic partnerships", particularly where weaker Clubs are involved.
It notes that weaker Clubs will have to address premiums and/or resort to unbudgeted supplementary calls in the face of rising reinsurance costs and a claims experience that is unlikely to improve.
It adds that the number of `A' rated insurers offering fixed premium P&I to owners of large ships has declined from five to one over the last year and that "2000/2001 looks set to see a nine-year low point in overall market results".
