Shipowners on average will face a 33% increase in their contributions to the International Group of P&I Clubs reinsurance costs.

As expected, renegotiation of the International Group of P&I Clubs general excess of loss cover — which includes claims in excess of $100m up to $2bn — resulted in the increase, as its reinsurers looked to recover losses from two exceptional years of claims.

The International Group's reinsurers paid most of the $800m in costs for the 7,700-ceu Golden Ray (built 2017) wreck removal.

Almost all the clubs, except for Shipowners' Club, will pass the International Group reinsurance increase directly onto shipowner members.

The reinsurance increases are highest for container ships, which face a 55% rise from $0.42 per gt to $0.65 per gt.

Brokers have run through the figures and suggest that, in some instances, the overall cost of the hike in reinsurance costs will be higher than the general increases that are being asked by the protection and indemnity clubs.

Although the sudden increase is painful, the P&I clubs argue shipowners have benefited from a fall in the International Groups’ reinsurance costs over recent years.

This year's increase brings it back to pricing levels last seen in 2014 and 2015.

Gard CEO Rolf Thore Roppestad said: "There has been a system in place for decades that reinsurance costs are passed onto members on a direct basis and when costs are going down they will get the benefit and when costs are going up they will pay more.

"It is important to stress that in the last nine years they have got huge benefits from reduced reinsurance costs, and when there is an increase, we are working hard to make that as small as possible," he said.

Gard chief executive Rolf Thore Roppestad pointed out that the International Group's reinsurance costs have increased after several years of decline. Photo: Jim Mulrenan

It is, however, exceptional for a claim to exceed $100m and become a reinsurance claim. Claims over $10m are generally kept within the International Group's own retention and its captive insurance company Hydra.

The impact of the International Group claims on club finances was demonstrated when North P&I Club said that half of its 15% general increase this year is directly attributable to meeting the costs of the pool claims.