London P&I Club and the American Club have announced rate increases for mutual members at next year’s protection and indemnity policy renewal.

Both insurers are seeking to increase revenue in response to an expensive year for International Group of P&I Clubs pooled claims.

London P&I has set a 10% general increase but said further increases could be in store for members with a poor claims record.

It said in a note to members: “Rates and terms for individual members will be subject to additional uplift and adjustment, where required, in order to achieve an equitable contribution to the club’s premium income.”

The American Club announced a 5% general increase, which is at the lower end of general increases announced by P&I clubs so far this year. Further adjustments will be made based on members’ individual claims performance.

The American Club said its mutual P&I business and its fixed premium subsidiary#, Eagle Ocean Marine, had performed well, but the cost of International Group pooled claims has significantly hiked its claims costs.

The American Club also recorded a 3.1% increase in investment income in the year to November.

The International Group’s 13 members share claims over $10m, but the American Club has not submitted an International Group pool claim since 2016.

“2020 has performed well to date, the year currently exhibiting a modest surplus generated by significantly lower than expected losses within the club’s retention, but unfortunately offset by a further rise in the cost of pooling other clubs’ claims,” American Club chief executive Joe Hughes said in a note to members.

Hughes said there are plenty of reasons to be positive about the current policy year. But he said the general lack of premium income in the P&I industry needs to be addressed by higher rates.

“There remains an overarching market consensus that pricing levels for P&I risks are at an unsustainably low point and require, as a matter of general principle, sensible movement upward,” he said.