Marine P&I clubs to seek further rate hikes: Report

Most mutual insurer marine protection and indemnity clubs will seek further rate hikes from shipowners at the Feb. 20 renewal to keep up with rising claims costs, rating agency A.M. Best Co. Inc. said in a report released Tuesday.

The clubs saw higher claims activity in the 2024-2025 policy year, driven by the Baltimore bridge collapse involving the cargo ship Dali last March, which could potentially be the costliest marine casualty on record, Best said.

The 12 clubs that comprise the International Group of P&I clubs saw a more than 10% increase in the cost of their reinsurance program for the 2025-2026 policy year, the report said.

Reinsurance renewal cost increases are typically fully passed on to shipowners through a specific levy on top of P&I premiums, Best said.

“Current-year claims have been above expectations for most clubs in general, driven by a rise in the frequency of large claims, including pool claims,” Best said.

Eleven of the 12 clubs will apply increases of between 4% and 7.5% to mutual P&I premium rates this year, with only the Shipowners’ Mutual Protection & Indemnity Association not applying a general increase, Best said.

The rating agency expects the clubs’ underwriting performance to deteriorate for the 2024-2025 policy year. Expected high investment returns will be partly offset by the uptick in pool claims, Best said.