The IG achieved a strategic goal at 20 February 2016 with the increase in individual club retentions from USD 9 to USD 10 million per event. This level of retention will be maintained in 2017.
There have been significant increases in Hydra's exposure in the IG programme in recent years. The change in 2017 will be comparatively modest. Hydra's participation in the Pool Layer will be simplified from 20 February 2017, with Hydra taking 100% of the risk for the first USD 20 million layer in excess of the Pool (with the previous USD 20 million excess USD 100 million layer dropping out).
In addition, Berkshire Hathaway's 5% multi-year placement of USD 1 billion excess of USD 100 million will be replaced by a new alternative market with effect from 20 February 2017. This will have an incidental beneficial effect for the IG in their goal to eliminate the need for the 'fall back' cover purchased in 2016 to address the possible gap in cover from US insurers unable to respond to an incident involving Iranian interests (as the replacement market will not be a US insurer).
IG reinsurance costs overall were expected to follow the pattern of the renewal in 2016 with rates in 2017 again reducing by around 7%-8%
The IG achieved a strategic goal at 20 February 2016 with the increase in individual club retentions from USD 9 to USD 10 million per event.
The impact of the casualties of COSTA CONCORDIA and RENA dominated the IG reinsurance renewal discussions in the years following 2011. These were the largest and third largest individual P&I claims in IG history and led to significant increases in the IG reinsurance cost at the renewals in 2013 and 2014.
In more recent years however the claims record on the IG reinsurance programme has run relatively benignly. In the context of a positive recent loss record and a continuing soft reinsurance market, the IG reinsurance costs overall were expected to follow the pattern of the renewal in 2016 with rates in 2017 again reducing by around 7%-8%.
This prediction has materialised and the final rates for 2017/18 are shown in the table below.