A surge in costly protection and indemnity (P&I) pool claims is increasing shipowners’ premiums, with P&I clubs initiating increases of 10% to 20% at renewal, says international brokerage Aon.

Aon London’s P&I Pre-renewal Report 2007 found shipping operations have become more expensive due to the increased value of ships and technology, legislation compliance, and short supplies forcing increases in the cost of yard repairs.

It forecasts claims for last year to reach $US580 million ($664 million), with an average claim of $US18.06 million ($21 million). That figure is almost double the average claim in 2004 of $US9.66 million ($11 million).

And Aon predicts an “ominous outlook” for the remainder of this year, based on claims amounting to $US84 million ($96 million) in the first six months.

But Lumley Marine and Logistics National Manager Neil Hiller told Sunrise Exchange News he expects a limited impact in Australia.

“Probably less than half of Australian commercial vessel owners insure their marine-related liabilities with P&I clubs,” he said. “It is only the large vessels – which are relatively few in number – that have the need for the very high limits that the clubs offer. The effect of the club rate increases is not necessarily significant.”

Aon says rather than call for higher premiums, P&I clubs could consider increased levels of deductibles to reduce frequent small claims.

Stephen Hawke, Executive Director at Aon London, said the pool “must be fully prepared to cope with the rigours of a more expensive operational environment and the evidence of 2006 would strongly suggest that the preparation needs to start immediately”.

Mr Hiller argues trends in overseas claims are not being reflected here.

“Recent legal reforms have dampened down the tendency to pursue a litigious outcome,” he said. “Local insurers recognise this and brokers would serve their clients well by seeking alternative terms from specialist underwriters in this country who are not being impacted by poor experience from foreign policyholders.”