The return of higher claim volumes during 2024, increased exposure to larger claims, and continuing supply chain volatility have persuaded NorthStandard to adopt a precautionary 5% general increase in its 2025-26 premiums.
The announcement comes as NorthStandard forecasts a net combined ratio in excess of 110% for the insurance year ending 20 February 2025, following consecutive sub-100% performances in 2023 and 2024. The net combined ratio is partly offset by a forecast 6% return on investments and improved free reserves, which align with the club’s continuing S&P Global A rating.
With 14 large claims made of $1 million-plus in the first half of 2024, with seven being reported to the International Group (IG) pool by the end of the first six months of 2024, claims activity has returned to customary levels as expected after relatively quiet years in 2022 and 2023.
NorthStandard had reported two Pool claims by the mid-year point in 2024, with a further three being declared with provisional estimates. Whilst unusual, having five Pool claims at this time is not unprecedented, bearing in mind NorthStandard’s larger scale.
“Changes in established navigational routes, two major international conflicts and other geopolitical challenges have created an abnormal claims environment, with incidents occurring in locations where the ships concerned would not normally trade,” said Cesare d’Amico, Chair, NorthStandard. “It is in these challenging circumstances that shipping has most need of its best P&I providers.”
“We base our premiums on a long-term outlook rather than overreacting to circumstances in a single year,” said Jeremy Grose, Managing Director, NorthStandard. “Nevertheless, premiums must reflect changing patterns of risk, uncertainties in investment markets and inflationary pressures, as well as likely rises in reinsurance costs.”
Grose said enlarged scale continued to put NorthStandard in a strong position to withstand market volatility and outperform others in the sector, but a larger club inevitably faced potential exposure to more claims. “We support our members wherever their navigational decisions take them, using a balanced underwriting model to protect the unique benefits of the mutual IG P&I system,” he said. “Our response to changing conditions is to continue demonstrating that our premiums represent excellent value for money. Our skilled and experienced global in-house claims teams secure the best resolutions in the business and our loss prevention expertise is second to none in protecting assets from risk.”
NorthStandard has continued to grow its diverse specialty sector business this year. The club has also been investing in key maritime centres, consolidating in Tokyo, Piraeus, and New York, and opening a new office in Seoul. Loss Prevention initiatives include upgraded web-based Risk Intelligence covering threats from terrorism, piracy and stowaways, new data-rich GlobeView ‘Fuel Insights’ from testing specialist VPS, and Get SET! – its new digital portfolio, including Orca AI situational awareness, ShipIn FleetVision™, and a UKHO-based ECDIS Training Assessment tool.
Paul Jennings, Managing Director, NorthStandard, said the 5% general increase would apply to all P&I members, although each renewal would be agreed individually based on a review of claims and risk exposure. A rating increase of 5% would also apply to FD&D risks. “The Directors are convinced that these steps align with our principles of promoting fair and equitable mutuality within the P&I sector, combined with strong corporate governance,” said Jennings.
Source: NorthStandard
