Page 43 - WTW Asia Insurance Market Report
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Protection and Indemnity (P&I) had a notable year                   -10.0%
in 2015/16 from an underwriting perspective. The
International Group (IG) market has not seen an                   Net paid claims reduced
underwriting surplus of the size achieved in 2015/16 in over
25 years, discounting those years distorted by unbudgeted           88%
calls. The key driver behind this underwriting improvement
was a dramatic reduction in incurred claims. Despite a            Combined ratio improvement1
3.9% increase in tonnage entered in the IG, net incurred
claims reduced by a remarkable -14.4% across the market.        Marine Cargo insurance market conditions for buyers
Even with the significant downturn in overall claims values,    have never been better, thanks to favourable supply/
volatility in the severity of major claims means the financial  demand dynamics, moderate claims from global natural
outlook is by no means certain. The overall frequency           catastrophe disasters, coupled with financial stability
of claims in the market has not changed materially and          and discipline amongst insurers. Due to the lack of
consequently a reverse of the current low incidence of very     major claims to impact the Marine Cargo market and the
high value claims remains entirely possible. The anticipation   continued increase in capacity available we predict the soft
is that a number of clubs will announce premium rebates         market to continue in the foreseeable future. The cargo
or reductions in their deferred calls and widespread ‘nil’      market is showing no signs of hardening. Over capacity
general increases for the renewal on 20 February 2017.          from both new entrants to the marketplace and existing
                                                                insurers expanding their portfolios, together with losses
                        Continued variance between              having been spread over the global market place means
                  best and worst performing clubs               cargo insurance is still viewed as a relatively attractive
                                                                proposition despite dwindling returns.
                                                                1	 Compared to the 2014/15 market average of 97%
                              Incurred claims reduced

                                                                43Asia Insurance Market Report 2016
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