North P&I Club has announced a 15% general increase in premium at next February's policy renewal in response to what it describes as "one of the most challenging years on record."
North P&I said that is expecting an underwriting loss in the current policy year with a combined ratio of over 110%.
That comes after reporting a 113% combined ratio in the last policy year, and 125% in the year before that.
Half the 15% increase in premium is to be used to cover the club's share of the International Group of P&I Clubs claims pool.
The last two years has seen record claims levels at the pool, which covers International Group member's claims in excess of $10m.
“Over the last year, the prevailing marine insurance environment has faced many challenges, with rapidly rising International Group pool claim costs posing the most significant risk,” said North P&I chairman James Tyrrell.
The North P&I's finances has also been hit by Covid-19 related crew claims.
Last year high investment income helped North P&I overcome its underwriting losses. This year the expectation is that investment income will be considerably lower and, together with the underwriting losses, could result in a decline in the North's AAA-rated free reserves.
Chief underwriting officer Thya Kathiravel said that a general increase is the fairest way to address the underwriting shortfall.
“The directors are confident that announcing a transparent general rating increase remains the most appropriate mechanism to communicate the club’s overall budgetary requirements for the next policy year and is aligned with North’s principles of promoting fair and equitable mutuality within the P&I sector,” he said.
