IG Reinsurance Contract (GXL) structure for 2024/25

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The International Group (IG) Pooling and Group Excess of Loss Reinsurance contract (GXL) structure for the 2024/25 Policy Year has now been finalised. 

Members can read the original article from the International Group here.

This press release details the background to the IG's GXL renewal rates for the 2024/25 policy year. 

Following a relatively benign Pool claims environment for the 2022/23 Policy Year, 2023/24 has also started well. Whilst there has been some deterioration for prior years' claims within the Pool, the overall impact on the Group's reinsurance partners has not been significant and the hurricane season was less impactful than in the previous year with other non-marine losses. 

The GXL allows IG Clubs to offer uniquely high levels of free and unlimited coverage for most of the risks they insure. In securing this renewal, the IG remains grateful for the ongoing support of its leader, AXA XL, and also to its many other longstanding reinsurance partners. 

As part of the GXL, the IG maintains three private placements amounting to 25% of Layer 1 of the programme (USD 650m xs USD 100m). 

For Layers 2 and 3 the COVID-19/pandemic risk aggregated cover has been split from the Malicious Cyber aggregated cover. For both these risks there continues to be free and unlimited cover for all claims up to USD 650m xs USD 100m, but now with two towers of separate aggregated cover for claims above USD 750m up to US$2.1 billion. 

To ensure the fairness of cost allocation between different vessel types, each year the IG's Reinsurance Committee considers the vessel categories used. Having given due consideration to possible variations, for 2024/25 those categories remian unchanged with the rates having been adjusted as set out in detail at the end of this release. 

Members can read the full press release from the International Group on their website: Reinsurance contract (GXL) structure for 2024/25 - The International Group of P&I Clubs (igpandi.org)

Staff Author

UK P&I

Date28/12/2023

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A major strength of the International Group remains its pooling arrangements and the General Excess of Loss and Collective Overspill Programme (GXL programme), which provides shipowners with un-paralleled levels of cover.  All shipowners will be aware of the hardening reinsurance market and upward pressure on premiums.  Despite this, the longevity and relative stability of the GXL programme has enabled the Group to achieve renewal for 2020/21 on expiring rates for shipowners.  Of additional benefit, the US$2 billion excess of US$100 million placed in the commercial market has been confirmed for two years.  This will help provide a degree of reinsurance pricing stability for the next two years whilst maintaining flexibility to fund claims within the Pool.

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