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Marine Insurance Cost To Rise

Lars Rhodin, managing director of The Swedish Club. Photo: The Swedish Club

Posted on December 10, 2020

Both The Swedish Club and the North P&I Club have declared cost increases following challenging market conditions.

In a move designed to improve the balance between claims and premiums, The Swedish Club has announced a 5% General Increase (P&I).  The Club said its Board recognised that premiums across the whole P&I industry, which have been in decline over some time, will not be sufficient to meet the market’s expected claims and expenses. This applies to the Club as well, and the P&I performance is expected to be in deficit this year.

Lars Rhodin, managing director of The Swedish Club, said: “In a turbulent world it is important to implement the checks and balances necessary to continue to operate sustainably and for the benefit of our members.”

North P&I Club

The North P&I Club said a rapid escalation in pool claims and unsustainable premium rates means it will seek a 10% general increase in P&I rates for the 2021/22 policy year.

In its 2020 Pre-Renewal Report, North says its retained claims so far this year declined, with claims over US$1m slightly down. The Club also achieved a positive return on investments of 2.16% (around $20m) by its August mid-year point.

However, the aggregate value of the ten pool claims declared to the International Group of Clubs in the first half of the year is the highest in at least 25 years. This, combined with the income squeeze brought about by “unsustainable” premium rates, has led North to project a combined ratio surpassing 110% as of 20 February 2021.

By Rebecca Jeffrey

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