04 August 2025
2024-25 P&I CLUB RESULTS OVERVIEW
High Level Summary
Free reserves increase to
a new record high
Average (2024) investment return of
6%
Average (2024) market combined ratio of
This is the technical performance before investments
Overall result in 2024
returned to the membership, in forms of capital and premium returns (by 3 Clubs)
Underwriting performance at an estimated
-USD350m loss
5-year average market churn running at an estimated
Further general increases predicted for
2026
In the biosphere of P&I, 2025 has got off to a much better start compared to last year, which was a heavy year for pool claims (2024 is expected to be a record high year for pool claims). There is an air of optimism, with record free reserves standing at a market high of USD5.9 billion, bearing in mind that the swing in market free reserves in the last 5 years is 7.1% or USD393 million. Again, most of this is driven by the investment of reserve and not underwriting, which in the last 5 years lost an estimated USD825 million.
The start of 2025 has seen fewer reported pool claims, and investment markets continue to be driven by the geopolitical state of play, although this seems to be a bit more settled now compared to early spring. However, in the current scheme of things, it wouldn’t take much for the markets to react negatively later in the year, with more threats of US or reciprocal tariffs, trade conflicts, geo-political conflicts in Europe and the Middle East and general uncertainty.
Keep in mind that several of the results posted by the P&I Clubs have a cut-off date of 31 December, and the equity markets have all moved between now and then. Therefore, the mid-year 2025 actuals will be something to monitor more closely when we evaluate our 2026 predictions and renewal sentiment.
The fundamental of market churn remains, meaning that if a Club achieves an actual 2% increase, after imposing a 5% general increase, by the end of the year, after sales, additions to fleet, and competition for new tonnage, it doesn’t take much for that achieved 2% to be eroded in terms of actual earned premium by year end.
Therefore, the outlook is that general increases in 2026 will remain, but we think the dynamics are showing some early signs of change in favour of the members now – by that we mean more manageable renewals, and we are exiting the hard market cycle. And with USD6billion in the bank collectively, more cash back.
All 12 P&I Clubs have now released data concerning their financial performance in the past 12 months ending between 31 December 2024 and 31 March 2025. 7 of these clubs have released formal financial statements, whilst the other 5, who have yet to do this, have made results announcements. In the tables below, those clubs who are yet to release formal financial statements are shown in italics.
Consequently, there are some gaps in the data due to inconsistent disclosure; however, the trends in the market and estimated market results overall can be construed with a few assumptions.
The year 2024 has been characterised by a return to more significant levels of pool losses, which started with the MV Dali casualty in March 2024. Fortunately, investment yields have remained good, and this has enabled the clubs to increase free reserves by some 4% after distributions to members.
Underwriting Performance
The year benefited from a general increase averaging 6.5% despite having made an underwriting profit of USD163 million in the previous 2023-24 financial year, itself the second consecutive year of underwriting profits. However, these two years featured a relatively benign claims environment, particularly as regards pool losses.
In 2024-2025, we saw a significant return of large and pooling losses. We understand that there have been some 23 pool losses so far in the year, with several other claims just below the threshold. We estimate that these claims have cost the pool between USD650 and USD700 million. If we include the cost of individual club retentions on these claims and the cost to Hydra Insurance, these claims have cost the group over USD1billion already.
The overall estimated market underwriting result, on an actual premium basis, is projected to be a loss of approximately USD350 million with an average combined ratio of around 110%.
*Result and Combined Ratio are on an ETC basis
- Information not yet available
Investment Income
Investment income, net of forex gains and taxes, totalled USD711million in 2023-2024 as markets recovered from the previous year’s bond market crash. Markets continued to be volatile but positive during 2024-2025 despite geopolitical uncertainty ramping up still further.
The overall estimated market investment result for 2024-2025, inclusive of forex gains and losses, and after tax, is projected to be a gain of approximately USD700 million with an average yield of some 6.0% to 6.5%.
*Investment income includes forex gains/losses and is net of tax
Member Distributions
During 2024-2025, three clubs made distributions to members in 2024-25 – either in capital or revenue form – amounting to USD122 million. This compares to 4 clubs distributing USD69.6 million in the prior year.
Overall Result and Free Reserves
So, once again, the net outcome of 2024-2025 is an increase in free reserves with an overall surplus of USD361.3 million being generated. USD122 million was distributed to members, leaving free reserve to increase by USD239.3 million.
In the table below, the movement in several Clubs’ free reserves is impacted by provisions relating to tax disputes, the outcomes of which may ultimately prove to be in those clubs’ favour. These movements are reflected in the table below against the overall result.
Free reserves thus totalled USD5.9 billion at the end of the most recent reporting cycle.
*Overall result +USD20.7m, but USD10m cessation tax adjustment means movement in Free Reserve is USD10m lower
The Prognosis
An average general increase of 5.2% was set for the 2025-2026 renewal, which will help defray the underwriting loss, and the current year has to date seen a comparatively low incidence of pool-level losses, although it is far too early to draw any conclusions on this subject yet.
Reinsurance costs rose for 2025-2026, and so, for now, we expect to see a continued underwriting loss for the year.
Investment income continues to be volatile, and we see little change in this dynamic as tensions continue to escalate in the Middle East. We would expect to see the investment yields fall in 2025-2026.
Collectively, the Clubs remain strongly capitalised at almost USD6billion, so they should be able to sustain any overall loss that might arise in 2025-2026. The Gard acquisition of Codan’s M&E business will likely strengthen its balance sheet still further.
With the general marine market sentiment back in a soft market mode, however, the P&I market, which is predictable (we find), will still be looking to manage its churn and competition. The rate of erosion for new additions (not just new buildings) is fierce, and this, in combination with lower value claims, pool claims, and investment volatility, means that general increases are here to stay in 2026 and 2027.
We are predicting general increases averaging close to 5% to be announced for the 2026-2027 year in the autumn of this year, although some clubs may be more needy than others. We also expect to see more capital and revenue-based returns of funds to members later in the year from the financially more powerful clubs. We also note a sense, from our clients, that some additional Clubs need to give capital-based returns (who haven’t done so in recent years). These are starting to become more of an expectation now that the free reserves are at record highs. This pressure will continue if the market goes beyond USD6billion free reserves when the 2025 reporting comes out next year.
Following the recent Sri Lanka Supreme Court award of USD1billion in compensation against the owners of the X-Press Pearl and related parties, we are reminded of wider pressures on the P&I market. The vessel was entered in the London Club and, we understand, fully reserved against pool exposure - thus any adverse development ultimately arising on this claim could fall on excess reinsurers. Due to the long-tail nature of such matters, and indeed, this is not the only case of its type out there, such awards will be appealed for years to come. The market continues to monitor, but it does not seem a current cause for undue alarm. A better idea of the P&I reinsurance environment will emerge in the autumn.
We will update our thoughts and analysis of the market position in the coming months as trends become clearer and further data is available. However, at this early stage, looking at the half-year, we look forward with cautious optimism for members.
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