P&I: A New Player in the World’s Equity Markets

by Bridget Hogan

Changes in the structure of P&I Clubs mean at least $1.5 billion will, within three years, be held in case of need following casualties. The Clubs have moved towards holding large reserves. Increased levels of net exposure and more stringent statutory environments have contributed to the need for Clubs to increase net assets. These far exceed levels considered necessary in the past. With such huge reserves being held long-term, Clubs’ managements have turned their attention to investments.

In the past, Clubs’ funds were held for the settling of claims and might be needed on short notice. Huge amounts of shares, which may need to be sold at a loss due to a large claim, could not be bought.

All this has changed and, in some cases, the assets of Clubs have nearly quadrupled this decade. In addition, there has been the imposition of the regulatory requirements applied throughout the insurance industry, including P&I Clubs demanding the creation of statutory reserves and the imposition of solvency criteria.

This is only an excerpt of P&I: A New Player in the World’s Equity Markets

Content is restricted to subscribers. To continue reading please Log-In or view our subscription options.