The Japan P&I Club has continued to rebuild its free reserves amid the rising costs of claims from inflation and geopolitical disputes.

The protection and indemnity club reported a 29% increase in its free reserves, a key indicator of financial strength, to reach ¥35.37bn ($221.8m), according to an update following a board meeting.

The finances of the club have been hit hard in recent years by fluctuations in the yen against the dollar.

But it recorded an overall net surplus of ¥6.86bn ($43m) in the 12 months ending March 2024, allowing the club to increase its free reserves by ¥7.93bn ($49.7m)

Net premium income was ¥24.84 bn ($155.7m), down from the previous year when it was boosted by a supplementary call to its members because of the currency volatility.

Underwriting expenses were also down to ¥20.58bn ($129m). Investment income was ¥8bn ($50.2m)

“The balance of insurance income and expenditure has improved through various measures,” the club said in a circular to members. “However, it has not reached the desired level yet.

“Moreover, the business environment for our club remained uncertain, with claims becoming more expensive, due to continued global inflation and war risks, notably the Russia-Ukraine war and the Israeli-Palestinian conflict.”

The club is the eighth largest by tonnage of the 12-strong International Group of P&I Clubs. The International Group covers about 87% of the global oceangoing fleet.