Released on: December 5, 2007, 12:36 am

Press Release Author: Alexandra Lewis

Industry:

Press Release Summary: The 2007 P&I renewal season concludes today, after what was a
more protracted process than many commentators were predicting. Although the P&I
clubs' advertised General Increases were in the single digit range - marking the
lowest level for seven years - the renewal proved remarkably tough with most clubs
sticking resolutely to their renewal requirements.

Press Release Body: The 2007 P&I renewal season concludes today, after what was a
more protracted process than many commentators were predicting. Although the P&I
clubs' advertised General Increases were in the single digit range - marking the
lowest level for seven years - the renewal proved remarkably tough with most clubs
sticking resolutely to their renewal requirements.

The key factors behind this inflexible attitude are:

* levels of Pool claims (individual claims between US$6-50 million) for 2006 are
at a record high in comparison to previous years and even outstripped the annus
horribilis of 2004
* requirements of future solvency regime Solvency II, while undefined and still
subject to revision, are making clubs prudent in ensuring that the existing
level of free reserves is not diluted.

There has been some evidence of clubs working rigorously to a renewal budget, giving
little flexibility to underwriters who worked within highly rigid parameters.
However, we have seen some aggressive approaches from clubs eager to gain market
share in developing regions and some rating tolerance for changes in terms and
conditions.

The passenger sector was hit separately by the double whammy of a reduction in cover
for passenger liability coupled with a massive increase in the reinsurance tariff,
ostensibly to anticipate future Athens Convention liability limit increases. The
passenger community is querying why the cost of their catastrophe cover should be
hiked to anticipate, an as yet unratified convention change which will impact, if at
all, on the attritional and thus club retention level.

The very lateness of the announcement of the reinsurance tariffs was an additional
injustice for a sector that has an unblemished record on the reinsurance contract in
recent years. This left operators with less than a month to take on board the
changes and budget for the 70% increase in their reinsurance tariff.

The good news for the non-passenger sectors was that the reinsurance tariff renewal
was neutral or even slightly decreased.

It is too early to accurately estimate the net premium increase across the market as
a whole, suffice to say that net premiums will have risen, probably in the range of
5 to 7.5%.classic
car insurance

Aon UK is ranked by A.M. Best as the number one global insurance brokerage based on
brokerage revenues and voted best insurance intermediary, offering classic
car insurance, high value home insurance, entertainment and media liability
insurance and construction insurance.


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