International Group P&I Pool and Reinsurance Program

The twelve protection and indemnity clubs that make up the International Group insure the liability of the vast majority of the world's ocean-going fleet. Each keeps the first layer of every claim on its own; above that, the loss goes into a common pool and is shared among all clubs under a formula that weighs tonnage, premiums and loss history. Above the pool, the clubs jointly buy a General Excess of Loss reinsurance program, placed in the market and partly with their captive, Hydra. A final layer, called overspill, can be called from every member shipowner if a claim exceeds the program. The problem it solves is scale: no single mutual can absorb an oil spill or a bridge collapse, and buying together secures capacity no club could obtain alone. The flip side is correlation: a very large claim is paid by the whole fleet, through calls on members.