Ship owners will experience another round of premium increasesas underwriters have been seeking increases ranging from 10-29percent for the 2009-2010 protection and indemnity insurancerenewals, according to an executive with Aon.

P&I is broad coverage for maritime risks.

Steve Griffiths, a director with the Chicago based insurancebrokerage firm, out of London, said this is the ninth year insuccession where the clubs [underwriting pools for these risks]have attempted to improve their underwriting results through theimposition of a general increase, resulting in at least a threefoldpremium hike in owners' premiums since 2001.

However, he said, after almost a decade of increases, the clubsare still failing to achieve the rates they need to balance claimsand overhead against premiums.

In the midst of financial turmoil, regulators and ratingagencies continue to focus on solvency margins, he continued. Theconsequences of the global financial crisis in the second half of2008 will not be known until the 2008-2009 year accounts arereleased in late spring, but it is estimated that reserves willhave fallen by an average of 30 percent, he related.

By February 20, 2009, six of the 13 International Group Clubs(the collective underwriting pool for the risks) will have soughtto refinance through a series of excess supplementary callsdesigned to raise a staggering $535 million, he said.

As in previous years, underwriter discipline during renewalnegotiations has been largely maintained, with the same lack offlexibility shown 12 months ago.

All is not doom and gloom, he said. Last year's renewal periodappears to have been a good year for the pool (the collective clubmechanism that mutually shares all individual claims excess of $7million each). Although the effects of the North Atlantic winterare yet to be fully absorbed, only eight pool claims to date havematerialized compared to 33 in 2006 and 21 in 2007.

Smaller claims (below individual club retentions of $7 million)appear to be keeping pace with earlier years, although as globaleconomies anticipate recession, the picture should improve withless ship activity, Mr. Griffiths noted.

The question, he said, is how much of a time lag will there bebefore clubs enjoy any real benefit from reduced claimsactivity.

Actuaries, Mr. Griffiths explained, are likely to want to seeclear improvements over an 18-24 month period before permittingclubs to reduce their provisions for unforeseen or "Incurred ButNot Reported" claims, thus continuing the drive to raisepremiums.