Japan Club sets out renewal stall

JAPAN Club has unveiled a 7% headline rate hike for owners’ and charterers’ entries, making it the final International Group affiliate to set out its stall for the 2025 P&I renewal.

The move puts the IG’s only Asian member, which has traditionally counted on a loyal client base among Japanese owners, at the upper end of this year’s spectrum of general and target increases.

However, premiums will be frozen for its so-called naiko class of vessels trading in domestic coastal waters and for freight, demurrage and defence cover, which is effectively legal expenses insurance.

The total number of vessels entered as the end of October came to 3,603 including both owners’ entries and naiko class, aggregating 87.7m gt, according to a circular published on the marine mutual’s website.

In other favourable developments, the combined ratio for the 2023 business year came in at 91.8%, while the club clocked up zero pool claims and reserves grew 29% as of the end of last March.

Even so, a meeting of the board in Tokyo on Friday came out in favour of a substantial GI.

“In view of the upward trend of global inflation and insurance claims, it is important to continue to improve the balance between premium and claims,” the club said.

“It is also necessary to maintain a robust, stable and sustainable P&I business in the face of elements of uncertainty, such as natural disasters and geopolitical risks.”

The 2021 policy year is now closed. While 2022 remains open, no further calls are expected after an earlier 40% supplementary call. The 2023 and 2024 policy years are described as unchanged.

The announcement from Japan Club means that all 12 IG clubs have now shown their hand for 2025.

Britannia is seeking a 7.5% increase, the American Club 7% and the UK Club 6.5%.

NorthStandard, Skuld, Steamship Mutual, Swedish Club and West of England are all looking for an additional 5%; and Gard wants a targeted 4% rise in premiums.

Shipowners’ Club, which is in a unique situation owing to its small craft specialism, is leaving premiums unchanged.

Gard, Skuld and Steamship Mutual all have sufficient balance sheet strength to give renewing entries substantial cashbacks, which more than offset the higher premiums they are demanding.

All announced premium increases from all clubs are subject to negotiation, with brokers often able to secure discounts for large fleets and good records.

Next year will mark the seventh successive year of inflation-busting increases in P&I premiums. 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 that they numbered eleven 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.

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