Shipowners are expressing growing frustration as Protection & Indemnity (P&I) insurers continue to raise premiums for the sixth consecutive year. Clubs are implementing broad-based increases despite collectively strong financial positions and healthy reserves.
Over recent renewals, most International Group P&I clubs have imposed general premium rate hikes—typically in the 5–7.5% range—even though underwriting results have improved. Some clubs have also frozen deductibles, while others have increased them, adding to the rising cost of risk.
The sharp rise in premiums follows years of elevated claims and investment uncertainty, including losses from hull fires, environmental incidents, and geopolitical shipping disruptions. Despite robust investment returns helping to bolster capital reserves, insurers argue that ongoing inflation in repair, casualty, and legal claims necessitates sustained rate increases.
Shipowner groups are warning that persistent premium inflation is becoming untenable, putting pressure on the shipping industry’s margins. Many are urging P&I clubs to balance the need for financial security with proactive underwriting discipline.
🌍 Wider Impact
Continuous premium hikes may begin to reshape risk management strategies among shipowners. Higher insurance costs could push operators to reassess vessel maintenance, safety programs, deductibles, and coverage levels—all in pursuit of cost control amid a challenging economic environment.
🔍 Interesting Fact
Despite the growing premium burden, P&I clubs currently report combined loss-and-expense ratios below 100%—indicating technical underwriting profitability. Nevertheless, they maintain that the step-up in premiums is vital to mitigate inflationary and catastrophic claim pressures.