Tanker insurance premiums to rise in 2023

Clean tanker insurance premiums will be 10.5pc higher on the year in 2023 while crude tanker premiums will be 4pc higher, according to the International Group of P&I clubs.

In addition, the special war risk P&I (protection and indemnity) cover will be suspended for any vessels venturing too close to the Black Sea coasts of Russian and Ukraine.

"Due to the ongoing active war between Russia and Ukraine, the IG's excess war reinsurers require territorial exclusion language," International Group said. This is in line with policies already implemented by reinsurers, who have been pulling back from underwriting any Black Sea-related trades.

The War Risk P&I cover will remain limited to $500mn for each vessel in any one event.

Dry cargo insurance premiums have also been revised higher (see table).

The Group's claim-sharing arrangements are reinsured by Hydra Insurance Company. Hydra is a Bermuda incorporated company in which each of the 13 group clubs has its own segregated account fencing its assets and liabilities from those of the company or any of the other clubs. A further $1bn of reinsurance cover — the collective overspill — is purchased by the group to provide protection in respect of claims exceeding the upper GXL or general excess of loss, a type of reinsurance in which the reinsurer indemnifies or compensates the ceding company for losses that exceed a specified limit.

These new rates include the Hydra premium, collective overspill cover and excess war risks P&I for the year commencing 20 February.

By John Ollett and Sheel Bhattacharjee