Chicago-based Aon Corporation suggests that clubs of individuals insuring shipping should reduce their  current reliance on unbudgeted or high-risk investment income.

P&I clubs are consortiums of private individuals who insure ships, commanding premiums for their liability. Over 2006 and 2007 there was a surge in the number and value of shipping claims. Then, over the last year or so markets, fell dramatically and the clubs' high exposure to equities markets caused heavy losses.

According to Aon, the P&I clubs' reaction has been to seek more, riskier investment income rather than becoming more conservative. Not only, say Aon, have some clubs been tardy in decreasing their investment portfolio risk profile, seven out of the 13 clubs have made unbudgeted refinancing calls over this last year.

“The flight from equity to cash and bonds was for many clubs too little too late: the P&I landscape resonated to the crashing of barn doors as the horses disappeared over the horizon,” said Stephen Hawke, head of Aon’s marine liability team.

According to the insurance broker’s P&I mid-term review the 2006/07 surge was random, meaning there is no need to chase high investment revenues. Moreover, reduced shipping activity due to the global slowdown should lower the overall number of claims, stabilising ship-owners’ premiums.

“P&I clubs can’t be blamed for the unpredictable but can grasp control of their own underwriting and investment strategies. The inability to predict the inherent volatility of the modern world - random years of very high value claims and falling investment markets - is excusable. What is not is a persistent inability for clubs to control the controllable by continuing to run underwriting deficits,” added Mr Hawke, who advocates a “modest” 0-7.5 per cent general premium increase in 2010.

As well as advising the ultra wealthy, Aon provides global insurance brokerage and risk advice for shipping companies.