Willis, a risk management and insurance intermediary, recently released an analysis of the Protection and Indemnity (P&I) line of insurance for 2007/2008, saying that the year could have the worst ever claim history on record.

The study, called Protection and Indemnity Market Review, contains financials and claim information broken down into "clubs" that have member countries or regions. It showed that 2007/2008 registered the highest recorded level of international outstanding P&I claims. Those facts were evident for the American club, which had net paid claims increase by 23 percent and net outstanding claims top $24 million. Large gains in investment income, which nearly doubled, helped compensate for the negative effects, however.

Willis said that the development of very large claims was one of the primary factors in the increase in outstanding claims, noting that 2006/07 will represent the worst ever Pool claims cost result for the market. Willis said the leap in the cost of large claims and their inevitable impact on P&I rating going forward has been one of the key points of discussion during 2007/08. They went on to say that the increase in Pool claims alone (compared to the average claim levels of the previous two years) is equivalent to between eight and nine percent of the entire premium into the International Group.

P&I Insurance protects a vessel or ship and its owners and operators against liability for bodily injury and third-party property damage. The policy provides liability protection for injury, illness, and loss of life resulting from the operation of the insured vessel, loss or damage to the property of others not on board, and the costs involved in investigating and defending claims and lawsuits. It also is commonly written in conjunction with Hull & Machinery insurance for vessels and marine operations such as tugs, barges, fishing vessels, excursion boats, and marine contractors.

The full report is available at www.willis.com.

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Willis Publishes Gloomy Protection and Indemnity Report

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