A total of 24 claims in excess of $10m were placed with members of the International Group of Protection & Indemnity Clubs in the 2018/2019 insurance year, according to documents seen by TradeWinds.
The figures suggest an end to the benign claims environment that clubs have enjoyed over recent years.
The International Group’s 13 mutual members share claims of more than $10m in a pooling system and use their own funds and the group’s reinsurance cover to meet the bill.
Expensive claims
The total pool claims made in the 2018/19 insurance year appear to be well in excess of the average.
In the past three protection-and-indemnity years, which run from March to February, claims averaged just 15 per year.
While in the past decade, the 24 claims made in 2018/2019 exceed the number made in any other year.
The closest is 22 claims in the 2012/2013 period, according to insurance broker CTX.
CTX data shows the total bill that year was $419m. With some expensive claims working their way through the books of the International Group members, there is concern the total will now be exceeded for 2018/2019.
International Group chief executive Andrew Bardot points out that some of the pool claims have been filed on a precautionary basis and may not be realised, which would mean that 2018/2019 could be in line with recent years.
He said: "The more random nature of the claims which engage the pool and the reinsurance layers mean that it is difficult to read anything particularly meaningful into the claim numbers."
One of the most expensive incidents will be the fire on the 15,000-teu Maersk Honam (built 2015), which is already expected to be the most costly general average claim ever.
It is unclear at this stage what the P&I clubs' share of the general average will be.
The more random nature of the claims which engage the pool and the reinsurance layers mean that it is difficult to read anything particularly meaningful into the claim numbers
Andrew Bardot
However, Maersk Line's P&I provider, the Standard Club, has been joined by three other clubs in the claim as a result of cargo slot-sharing arrangements with other operators in which the Maersk Honam was involved.
Claims breakdown
In 2018/2019, the West of England filed the most pool claims with five, Gard and Standard Club had four each, North P&I Club received three, the London P&I Club and Shipowners' Club reported two claims each, and Japan P&I Club, the UK P&I Club, Skuld and Britannia P&I had one each.
The number of pool claims grew rapidly at the end of the P&I year after a spate of casualties in January and February 2019.
The latest casualties to emerge as pool claims include: the 9,300-teu APL Vancouver (built 2013), which caught fire; the 19,224-teu MSC Zoe (built 2015), which lost containers; the 147-metre pipe-layer Star Centurion (built 2002) that sank following a collision with the 40,000-dwt product tanker Antea (built 2000); and the 17,900-gt ferry Ulysse (built 1997) and the 5,018-teu CSL Virginia (built 2005), which collided.
Focus will now turn to whether a bad year for expensive claims will affect the finances of the P&I clubs. The increasing claims environment comes as clubs are also experiencing a downturn in investment income.
One warning sign that the year ahead could be difficult for P&I clubs came when the Shipowners’ Club recently reported a $38m loss last year, which it largely put down to investment losses at the end of 2018.
However, it said it had recovered most of the investment losses in the early part of this year.
