The London Club is looking to increase premium volumes 5% at the next renewal round, with a targeted increase that will differentiate by loss record.
The rate rise will apply to both protection and indemnity (P&I) and freight, demurrage and defence classes, with no change to deductibles in either instance.
The London Club – which some brokers have perceived as being under pressure in recent years – also booked a healthy gain in entries, according to a circular to members announcing the move. Mutual tonnage on risk was up 12% on the previous policy year.
The club reported a small underwriting deficit, which the club said resulted from higher than forecast retained claims and a larger than expected jump in pool claims, although this loss was more than offset by investment returns.
The 5% target increase puts the London Club bang in the middle of the pack of International Group P&I club rate hikes announced to date.
The UK Club is seeking a 6.5% increase; NorthStandard, Skuld, Steamship Mutual and West of England are all looking for an additional 5%; and Gard wants a targeted 4% rise in premiums.
Gard, Skuld and Steamship Mutual all have sufficient balance sheet strength to give renewing entries substantial cashbacks, which more than offset the higher premiums sought by that trio of clubs.
Most commentators expect headline increases next February to cluster in the 5% to 7.5% bracket, marking the seventh successive year of inflation-busting increases. Modal average increases came in at 7.5% in 2020, 10% in 2021, 12.5% in 2022, 10% in 2023 and 7.5% in 2024.
Factors at work include increased claims costs for most clubs, with pressure particularly being felt through the pool scheme.
While the overall number of pool claims in the year to date remains confidential, Lloyd’s List understands they numbered 11 as of the end of October, more than in the entire 2023/24 policy year.
Rates will be adjusted separately to reflect any changes in the cost of the International Group reinsurance programme, which looks likely to rise sharply in the wake of the Baltimore bridge collapse.
This article first appeared in Lloyd’s List, a sister publication of Insurance Day
