The rate rise is likely to be at the top end of premium hikes at the February 2016 renewal as the London Club was in the red last year and the investment outlook for the current year does not look good.
The London Club has a history of relying on high investment returns to overcome underwriting deficits but this could be a problem this year.
In a notice to members the London Club reports that there was a first half investment loss of 1.49% although this deficit has since been largely reversed.
“A cautious approach to planning for the part to be played by investment contributions continues to be required in the current environment,” notes the circular.
The London Club reports that retained claims on the current year are currently 40% down on the previous year as of 20 October, the eight month stage of the P&I year.
The 5% general increase applies to both P&I and freight demurrage and defence FD&D cover with deductibles for the former increased by $2,000.
The club chaired by John M Lyras of Lyras Maritime insures a 54m gross ton fleet. The club incurred a $3.2m loss through the year to 20 February 2015.
The Britannia Club announced a 2.5% general increase in P&I rates earlier this week but matched it with a reduction in the deferred call on last year by 2.5%.
