Protection and Indemnity (P&I) clubs are set to see a partial offset of strong investment returns in the 2024/25 period due to an increase in pool claims, according to a new report from AM Best.
The report, titled P&I Clubs: Record High Free Reserves Despite Challenges on Technical Performance, reveals that the record-high free reserves in 2023/24 were primarily driven by robust investment returns. These returns are expected to remain substantial for the 2024/25 period. However, rising pool claims are expected to impact overall technical performance.
AM Best anticipates that upcoming renewals will see further rate adjustments in order to maintain underwriting discipline. The report suggests that continued general rate increases will be necessary to ensure pricing remains adequate, especially as underwriting results are expected to deteriorate due to a rise in both the frequency and severity of large claims.
Related topics
