P&I Clubs Still Losing and Relying on Dwindling Reserves

Robust shipping markets have done much to mend the financial situation for P&I clubs. However, most clubs continue to have an underwriting deficit, which has led to another round of general increases.

Although percentage increases are favorable, there are huge disparities among clubs ranging from zero to 20 percent. While the overall market is weak, some clubs are much weaker than others. It is noted that clubs rely too much on investment income and that companies must raise premiums across the market in a fair and equitable manner.

The problem is that clubs tend to follow market trends and often fall victim to further weakening in their balance sheets by simply underwriting for market share.