In a nutshell, how would you describe the main role of the International Group of P&I Clubs (IG)?
The core roles of the Group are; to coordinate the mechanisms for sharing liabilities in excess of the individual club retention (US $10 million) through the Group Pool and the collective reinsurance of such liabilities through the captive and commercial market annual reinsurance programmes. Secondly to provide a forum for shipowners/clubs to share knowledge and expertise on matters related to shipowners liabilities and the insurance of such liabilities. Finally, to provide a voice for the industry with governments, maritime administrations and regulators, intergovernmental organisations and key stakeholders in the shipping and insurance industries.
What is the biggest challenge facing the IG today?
The Group clubs provide P&I insurance cover to approximately 90% of the world’s oceangoing tonnage. Today there are 13 clubs in the Group which vary significantly in size, risk appetite philosophy and approach to diversification. The fundamental cornerstone of the Group system is the mutual trust between clubs in the way clubs underwrite and handle claims which underpins their agreement to share claims and to purchase collective reinsurance protection for their respective shipowner stakeholders. There is universal support across the clubs for the Group system, however, as clubs continue to develop and diversify, there will be new pressures on the system. The Group has proved itself to be very resourceful and adaptive in meeting challenges to ensure that the member clubs remain “collectively stronger”.
What is the biggest challenge facing mutual P&I insurance?
The clubs must, as they have in the past, remain fully responsive and relevant to shipowners needs and evolve in the disruptive times ahead. Fresh challenges are arising such as the rapid development of new technologies, including digitalisation, MASS, cyber threats, the increasing focus on measures to preserve the environment and the challenges to shipowners’ well established rights to limit liability.
How do the IG and IUMI work together?
The Group has been an IUMI Affiliated Association for many years and since 2007 has participated on the IUMI Legal and Liability committee, where it has been instrumental in developing the programmes for the annual conference workshops and in providing speakers and panellists. The Group also assists the Facts and Figures Committee by providing P&I premium data for the annual IUMI statistics report. From the Group perspective, the interaction through the global reach of IUMI with insurers/reinsurers from around the world (many of whom participate in the Group’s reinsurance arrangements) is extremely useful and highly valued, and it is hopefully perceived as equally beneficial by the IUMI membership.
Nick – how do you see the IG and IUMI enhancing their relationship in the future?
The Group will continue to provide and enhance its support and input to IUMI and its member national insurance associations on matters relating to the insurance and reinsurance of shipowners’ liabilities. As recently reported in the media, the Group has committed to developing its data collection and analysis abilities with a view to collating and sharing more data, the relevant output from which can be shared with IUMI.
Andrew - during your time at the IG is there anything that you would have liked to see underwriters do differently?
In short, no. The Group is extremely fortunate to have built up, over many decades, strong relationships with the global marine reinsurance markets. In any one year, the Group’s collective reinsurance arrangements involve between 85 and 95 participating reinsurers. The longtail nature of marine liability exposure means that both the Group, and its reinsurers, enjoy long-term relationships which deliver benefits for both. The Group has been, and continues to be, very well served and supported by its reinsurers and this long-term relationship provides a very solid platform to build on in jointly developing innovative solutions to meet shipowners’ future marine liability insurance needs.
Nick – what is your view on the current state of the marine insurance market?
Overall, the marine insurance market continues to face challenging times, particularly in the H&M and cargo sectors which have seen some market players withdrawing from the sector or scaling back their participation. The consequent reduction in capacity, coupled with signs of hardening rates, should hopefully begin to address the long-standing problems in these sectors. The marine liability sector has performed better and has attracted capacity at rates which deliver value both for the market and for buyers.
Nick – what are your plans for the IG?
The Group has come a long way in the last 15 years and has recently embarked on several new initiatives, both internal and external, focused on improving the efficiency and responsiveness of the system for the benefit both of its shipowner members and for third parties affected by maritime incidents. Developing and building on this work will be a key objective in the coming years.
Raising levels of awareness and understanding of the very important role played by the clubs and the Group with states and regulators around the globe and working with the IMO and IOPC Funds to promote states’ ratification and uniform interpretation of the international maritime convention regimes and a unified approach to shipowners’ limitation rights will also be high on the agenda.
And in recognition of the increasing importance of Asia, not only from a global trade perspective but also as an increasingly important ship owning powerbase, there will be an increased focus in the region on raising the Group profile and awareness of the benefits which the system delivers.
Andrew – what are your plans for the future?
My plans for the future will involve doing things which my present position does not permit me the time to do. Family time, sailing, travelling, playing sport and building projects will certainly keep me busy. The city and the shipping legal and marine insurance sectors have given me my entire and very enjoyable career, and I leave with very fond memories. I will certainly keep in touch with the many good friends I have made over the years and will be revisiting EC3 in the years to come.
If you could each wave a magic wand and change one thing in the shipping industry what would it be?
Probably the perception that shipping is in some way a “dirty industry”, when compared with other forms of transport. The reality is that per tonne of goods transported, shipping is one of the cleanest forms of transport for moving goods from A to B. IMO 2020 should help towards addressing this negative perception and the shipping industry needs to consider and develop other initiatives aimed at promoting the message that shipping is a responsible industry and is playing its part in addressing global environmental issues and the safety of life, the environment and property transported by sea to ensure that there is a sustainable future.