Protection and indemnity market leader Gard is looking to increase premiums by 4% in February to deal with higher claims and uncertain global economic conditions.
The Norwegian insurer will combine the planned rises with handing 10% discounts to owners renewing their P&I cover for 2025, it said on Monday.
It will be the 16th consecutive year that the insurer will hand back capital to its owners, a record for the Arendal-based diversified insurer.
It reported its second-best results in its 117-year history earlier this year, with profits of $236m.
With gross written premiums of $1.18bn, Gard is the largest of the 12-strong International Group of P&I Clubs with one-fifth of its tonnage.
Gard’s strength has been built on a diverse portfolio, unlike other clubs that have focused on P&I.
Gard CEO Rolf Thore Roppestad said: “With this, we continue our streak of returning capital to our membership, providing stability and consistency in a volatile time.
“We ensure financial robustness and long-term resilience, while at the same time not holding more capital than is needed.”
Gard is the second of the big 12 P&I clubs to announce their plans for 2025, with rises expected across the board following a surge in large claims.
Steamship Mutual last month announced a 5% rise in premiums, coupled with a return of 12.5% to renewing members. Gard’s 10% owner discount is in line with last year’s level and resulted in $55m being returned to owners.
Brokers said it made sense to return capital, rather than reduce rate increases, with the P&I market only newly emerging from a tough few years.
The 12 International Group clubs only reported a combined underwriting profit in the most recent of the last four years, according to data from broker Tysers.
Returning capital is by its nature a one-off and does not have longer-term implications of reducing total premiums gathered, said broker Gallagher Specialty in a review of club results in August.
It said that reduced claims in 2023 were seen as a “lucky claims year” and a surge in casualties could lead to additional calls and increased rate volatility.
Gard said the owners’ discount reflected the club’s capital position, with its premium plans based on its forecasts for the year. It said the increase was necessary to ensure only a marginal loss for its mutual P&I cover.
Bjornar Andresen, Gard’s chief underwriting officer, said: “The macroeconomic outlook continues to be uncertain, and we need to take into account an expected increase in claims.
“With a moderate premium adjustment, we are ensuring that we can continue to offer mutual P&I at competitive prices, while, at the same time, ensuring the group’s long-term stability.”
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