Protection and Indemnity (P&I) insurance claims have surged to a ten-year high, as detailed in a recent report by Lockton, the leading independent insurance broker. The International Group of P&I Clubs has reported a collective underwriting loss of $312 million for the 2024/25 policy year, reversing two years of surpluses and contributing to a net loss of $98 million over three years. Net claims rose by 25% to $3.1 billion, surpassing the five-year average by 16%.
Emerging risks such as fires, electric vehicles, and mis-declared cargo have intensified financial pressures, compounded by inflation-driven repair costs and war-related disruptions in regions like the Red Sea. Longer voyages also increase exposure to weather-related issues and delays. Notably, suicide continues to be the leading cause of death at sea, with the financial impact of pool claims for the 2024/25 year potentially reaching $775 million.
While premiums rose by 5.2%, total income remained flat at $3.96 billion due to fleet churn, where older, higher-rated vessels are replaced by cheaper alternatives. Investment income of $711 million provided some relief, but free reserves grew only modestly to $5.96 billion, still below pre-2020 levels. Looking ahead, Lockton anticipates premium increases of 5–10% for the 2026 renewal as ongoing financial challenges persist for shipowners and clubs.
