Insurance Marketplace Realities 2023 Spring Update – Marine hull and liability

Rate predictions: Marine hull and liability

	Trend	Range
Domestic hull and machinery		+5% to +7.5%
London/international hull and machinery		+2.5% to +5%
P&I domestic		+5% to +7.5%
P&I crew/towing domestic		+7.5% to +10%
P&I international club		+10%
Domestic primary marine general		+5% to +7.5%
Domestic excess marine liability		+7.5% to +10%, more for underlying crew/towing – 1st layer
London marine liability		+10% to +15%
USL&H mutual		Flat to +5%

^*All rate projections shown above are subject to good loss record accounts (higher increases for accounts with adverse loss experience).

Underwriting in the current environment remains challenging.

• Marine underwriters that are requiring premium increases for claim inflation (personal injury and increases in raw material cost) and cost of reinsurance are increasing.
• Excess liability underwriters are reducing capacity and requiring ventilation between layers requiring quota share placements and additional market capacity.
• Due to increase in claim costs in the primary/working layer, excess liability attachment points between $2 million and $5 million are becoming more prevalent.
• Due to political unrest globally and specifically for the situation in Ukraine/Russia, we expect significant adverse developments in hull war market in carrier capacity, appetite and terms/conditions.
• Underwriters are seeking additional retentions on U.S. Gulf area hull risks due to consistent NATCAT losses.

International group P&I clubs

• For the February 2023 renewal, IG P&I clubs asked for average minimum general increases of +10%.
• The North and Standard officially merged February 20, 2023 (NorthStandard), which reduces the amount of available P&I club options from 13 to 12.
• With continuing deteriorating levels of large pool claims, high average market combined ratio and lower investment returns, there is nothing to suggest the February 2024 renewal will show much improvement, but it is premature to predict at this time.

Burdens are increasing on both sides of the negotiating table.

• Underwriters require substantial amounts of data, including loss control engagements.
• Underwriters remain under scrutiny to deliver profits despite fewer investment returns and an increase in claim costs in the current environment, which is negatively impacted from the buyer’s perspective. Underwriters remain under scrutiny by their senior management, who have become much more involved in the process. This negatively impacts the renewal process from the buyer’s perspective.

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for losses relating to the Ukraine crisis. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include coverage relating to the Ukraine crisis. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third-party sources we consider reliable; however, we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. The Ukraine crisis is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.