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This content is a press release from our partner Business Wire. The AP newsroom and editorial departments were not involved in its creation.

AM BestTV: P&I Clubs Buoyed By Reserves, Face Commercial Headwinds, Says AM Best Senior Director

March 15, 2019

OLDWICK, N.J.--(BUSINESS WIRE)--Mar 15, 2019--In this episode of AM BestTV, Catherine Thomas, senior director of analytics, AM Best, said renewals for protection and indemnity (P&I) clubs show a range of individual outcomes based on individual loss records and exposures. Click on http://www.ambest.com/v.asp?v=pandiclubs319 to view the entire program.

Thomas spoke about how unique the P&I clubs are and how they function.

“The P&I sector is dominated by members of the international group of P&I clubs, which collectively insure approximately 90% of the world’s ocean-going tonnage,” said Thomas. “Each of these P&I clubs is an independent, not-for-profit mutual insurer that covers third-party liabilities of their members in respect to the use and operation of ships. The P&I clubs also mutually reinsure each other through the international group pooling arrangement, as well as buy a reinsurance cover in the open market.”

Additionally, Thomas spoke about the environment in which these companies operate.

“The free reserves of the P&I clubs are at a high level, bolstered by several years of positive operating results. At the same time, their ship-owning members are facing difficult commercial conditions, which are putting pressure on prices. This together with a challenging claims environment means that the P&I clubs are struggling to achieve underwriting profitability,” she said.

Looking forward, Thomas said she believes that, “Since free reserves have grown in recent years and the sector as a whole is well-capitalized, with a buffer to absorb performance pressures, companies are well-positioned. However, with interest rates still low and equity markets volatile, the P&I clubs really do need to increase their focus on underwriting discipline in order to maintain their financial strength.”

To access a copy of this special report, titled, “P&I Clubs’ Balance Sheets Strong but Performance Under Pressure Amid Strong Competition,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=282928.

Recent episodes of AM BestTV include:

  • A Black Eye for the Industry: Spirit Commercial Auto RRG Insolvency Talk of CICA: The placement of Nevada-based Spirit Commercial Auto Risk Retention Group into receivership and how it might impact the insurance industry was the preferred topic of discussion at the Captive Insurance Companies Association (CICA) 2019 International Conference: http://www.ambest.com/v.asp?v=cica19.
  • Cyber Panel: Do Not Lose Sight of Overall Exposure Aggregation: Fred Eslami, associate director, AM Best and Scott Hammesfahr, product marketing manager, Guidewire Cyence Risk Analytics, said cyber coverage continues to grow, with insurers and captive sponsors exposed to a wider range of risks and accumulation: http://www.ambest.com/v.asp?v=cica1319.

AM BestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes athttp://www.ambest.com/multimedia/ambtvsignup.html. ViewAMBestTV episodes athttp://www.ambest.tv.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visitwww.ambest.comfor more information.

Copyright © 2019 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190315005370/en/

CONTACT: Lee McDonald

Group Vice President, Publication and News Services

+1 908 439 2200, ext. 5561

lee.mcdonald@ambest.com

KEYWORD: UNITED STATES EUROPE NORTH AMERICA NEW JERSEY

INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE INSURANCE

SOURCE: AM Best

Copyright Business Wire 2019.

PUB: 03/15/2019 11:37 AM/DISC: 03/15/2019 11:37 AM

http://www.businesswire.com/news/home/20190315005370/en