P&I clubs hike premiums as casualties and inflation drive costs higher

The UK P&I Club has announced a 6.5% increase in premiums in 2025, the highest by the main market players so far.

The third-largest member of the International Group of P&I Clubs by tonnage and premiums said projected pool losses from an increased rate of casualties and inflation were behind increasing costs.

Insurance costs set for multi-year rises because of higher claims, say P&I chiefs

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Four of the 12 members of the International Group have announced their planned increases, and brokers say others are likely to request larger increases than the UK Club.

UK P&I has announced the largest general rises from 2015 to 2024 of all the protection and indemnity clubs in the International Group, according to analysis by Tysers.

Its annual general increases have ranged between 7.5% and 12.5% since 2020. But the announced increases are not mandatory and are subject to negotiation with members.

Brokers and P&I leaders have suggested that the 2025 renewal will bring increases of 2.5% to 10%.

Market leader Gard reported a 4% general increase, Steamship Mutual requested 5% and West of England P&I Club this week announced a 5% rise for its mutual P&I tonnage.

The West figure was lower than some market players expected, although there will be larger increases for members with “adverse records” to reflect their increased risk.

West expects to report a small underwriting loss this year but with investment returns topping 5% in 2024.

“The Board recognised that premium is insufficient to meet expected future claims and operating costs as inflationary pressures continue,” it said in a circular.

By the end of October, there were 11 claims between $10m and $100m with the costs pooled between the International Group members.

Costs have already topped those from the past two years and are returning to what P&I leaders describe as normal levels.

Pool claims were $647m in 2021, then underwriting figures were boosted by unexpectedly low levels of $163m and $136m in the following two years.

Claims this year include those related to the deaths of six workers and the destruction of a bridge in Baltimore that was hit by the 9,962-teu Dali (built 2015) in March, which is set to become the biggest ever maritime claim.

The ship has cover with Britannia, which is yet to announce its planned increase for the year.