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The 2026 renewal season has been a difficult one for Protection and Indemnity (P&I) Insurance buyers. General increases – the additional amount that P&I clubs require from their members, represented as a percentage of the premium paid by each member – sat at a mean average of 6% across the International Group. The most frequent increase sat slightly lower, with 7 of the 12 clubs asking for increases of 5%. The American Club and Steamship members saw the highest increase of all, at 8%. In addition, except for Gard, all clubs have asked for standard deductible increases.
General increases act as the baseline for negotiation between clubs and their members, with clubs asking for larger increases from shipowners with a higher number of losses. Where shipowners perform well, brokers may be able to negotiate down from the general increase amount. However, the 2026 renewal has seen a tougher stance from clubs, who have generally held firm on their requested increases. As such, brokers are having to think differently about rating and deductible structures to minimise clients’ costs. In practice, we anticipate that clubs will achieve actual increases closer to 5%. If realised, this will take overall premiums in the International Group to more than approximately USD 4.1bn (not accounting for midyear organic growth).
Shipowners are members of their club, rather than insureds. As such, the majority tend to stay loyal to their P&I club at each renewal, with only a few headline fleets moving club or opening an entry with an additional club. At the time of writing, it remains too early to know whether there have been any notable movements.
Pool claims driving general increases
Several pressures on P&I clubs are driving the high general increases at renewal. A primary underwriting metric for clubs is their combined ratio – roughly, the sum of losses and expenses divided by earned premiums – with figures above 100% representing an underwriting deficit. For the most recent underwriting year (2024-25), the average combined ratio across the Group was 104.9%, reflective of the poor overall performance. Certain clubs fared better, however; individual ratios ranged from 69.2% to 137.7% in 2024-25. That this is at odds with the uniform nature of general increases is suggestive of deeper factors weighing on performance.
Much of this is to do with claims. While some clubs reported a fewer-than-expected number of claims within retention (those below USD 10m), those within the most common cohort (USD 100K–500k) have increased in frequency. But it is the pool claims – which are shared across the International Group – that have hit clubs the hardest. Consisting of large losses between USD 10m–100m in value, there were USD 467m worth of such claims at the close of the 2024 policy year – their worst year on record (not allowing for indexation).
Challenging jurisdictions, larger vessels, new technology to enable wreck removals, and increasingly expensive clean-up operations all contributed to the high volume of pool claims in 2024. Such is their size, these claims can have a material impact on P&I renewals in any given year. And, as claims deteriorate over time, their true magnitude will worsen: the same figure for 2024 is now estimated at USD 700–750m. Fortunately, anecdotal assessments of 2025 place it more in line with a normal year for pool claims.
The clubs are also contesting with the ongoing effects of churn. Newbuild orders volumes declined in 2025, following a strong 2024; however, orders continue to trend well above pandemic-level lows. As this new tonnage enters the market, older vessels – which typically face higher premiums – are scrapped, inevitably depressing average premium rates.
Economic volatility threatens investment returns
Investment returns across 2024-25 have been a critical offset to more modest underwriting results. The clubs saw a market total return of USD 710m (including Gard as a group), along with an average investment return of USD 59m, or 6% return. However, total market investment returns were 7% lower in 2024/25 than in 2023/24. Of the eight clubs to post underwriting losses, five recovered the deficit through investment returns – notably Skuld, Steamship, and UK.
But this performance is not sustainable. Although many clubs have reported solid investment gains throughout the 2025, the economic backdrop is shifting. With rate cuts now emerging across major economies, the investment environment has become more volatile and less predictable; most clubs acknowledge that strong results may not persist throughout the full policy year. Credit agencies also remain wary of any reliance on investment income to offset underwriting deficits, reinforcing the need for stronger premium adequacy to stabilise technical results.
Other factors threaten to erode clubs’ investment gains to-date. Most clubs conduct their financial reporting and receive payment for premium in USD. But a weakening of the dollar against the non-USD operating cost base of European and British clubs is creating expense pressures, at a time when reserves are also exposed to currency mismatches. In tandem, geopolitical volatility continues to unsettle markets, injecting fresh uncertainty into clubs’ liquidity positions. Shipping-related trading patterns are also evolving in response to regional tensions, sanctions, and rerouting, further amplifying uncertainty.
Group reinsurance renews flat
The International Group buys a collective reinsurance contract, providing limits of USD 3.35bn for any one event (sub-limits apply). Once placed, the costs are shared across all vessels entered in the Group. The allocation between vessel of different types is based upon the risk that each type has posed to the reinsurance over time.
The Group reinsurance programme renewed flat for 2026. The reallocation between vessel categories saw an increase for container operators – a sector that continues to experience a concerning level of claims. However, there was a welcome reduction for passenger rates, recognising a continuing positive record in that sector since the Costa Concordia capsized in 2012 – to-date, the largest P&I claim.
Outlook
When clubs are sufficiently capitalised, they typically return some of that capital to their members. In 2026, two clubs have returned capital to their membership: Britannia (5% of members’ premium) and Gard (10%). Similar market-wide returns are likely to follow in future years and we expect more clubs to follow suit
As we move into the next policy year, the biggest question hanging over the P&I market will be the outcome of claims brought against the Dali container ship, following its 2024 collision with Baltimore’s Francis Scott Key Bridge. The owners and operators of the Dali have already agreed to pay over USD 100m to settle a US federal lawsuit, covering clean-up costs. However, this does not cover the cost to rebuild the bridge – which the Maryland Transportation Authority recently estimated at USD 4.3–5.2bn. If realised, this would take the claim over the Group’s reinsurance limits, and result in the first ever overspill call. The impact on reinsurance is already priced for, but the incident does raise questions as to the adequacy of the Group’s reinsurance limits.
Looking ahead to next year’s renewal, members can expect more general increases of similar or greater magnitude to 2025, as clubs continue to reduce their exposure to investment volatility. To offset higher premium costs, members may seek to take advantage of the growing availability of claims-specific deductibles, including those for named perils, vessels, types of cargo, and geographies.
Talk to us
Our global team of marine experts work closely with our clients to provide comprehensive risk transfer solutions. We utilise our local knowledge to secure the right terms and protection layers for your risk, and help you to understand and navigate your challenges post-renewal.
For more information, reach out to a member of our Protection & Indemnity team.
Read more in our 2025 P&I Market Review.
