The P&I industry has faced a particularly challenging year, marked by mounting economic pressures, shifting regulatory landscapes, escalating environmental concerns, and intensifying geopolitical tensions. Adding to these complexities, the Baltimore Bridge collapse looms as a potential record-setting P&I claim, poised to be the largest in the industry’s history. As always, the P&I market has responded promptly and carefully, striving to maintain its set objectives and guide its members through volatile global market conditions. This stability has proven essential in sustaining the confidence of shipowners and operators, helping them thrive in an uncertain world.
The drivers for renewal 2025
The primary drivers for 2025 are expected to remain largely unchanged, negatively influenced by geopolitical uncertainty and volatility. Trade disruptions, the risks related to war activities, the bureaucratic complexities of sanctions, and the rise of the so-called “Dark Fleet” will continue to pressure shipowners and, by extension, their clubs. Additionally, environmental regulations, with an increasing focus on carbon emissions and trade generally, will continue to impact the industry.
At a more detailed level, the effects of the Baltimore Bridge (DALI) catastrophe are still unfolding. While it will take years to establish and settle liabilities and compensation, there is no doubt that the claims will be significant, with estimates ranging from $1.5 billion to $2.5 billion, leading to consequential impacts on the group reinsurance contract.
So, what about renewal 2025?
Regarding the 2025 renewal, strategies among clubs vary. It is essential to note that many clubs have been affected by higher-than-average Pool claims from their members. Indeed, claim trends are pointing towards higher levels compared to the past two years, although not yet reaching alarming levels. However, it is crucial to consider that the North Atlantic winter season historically generates significant claims.
Based on the above, one might anticipate premium increase requests of around 5%–7.5%, with some major clubs possibly returning capital to renewing members. A recent example comes from Gard’s P&I division, which announced a cash rise in premiums of +4% and a capital return to members for the 16th consecutive year.
Attention should also be given to potential marked increases in reinsurance tariffs, around 15%–20%, as a natural reaction to the Baltimore Bridge incident.
