Financials

Claims Position

Volatility continues to be the underlying theme of P&I claims in the 21^st century. The 2025 policy year saw the UK Club on the right side of that volatility, with a significantly better than anticipated experience in its retained and non-mutual claims.   

All categories of claims saw a fall in value, with cargo and injury claims reported at around 30% of the previous year’s figures. Large claims, those above US$500,000, were less than 50% of the 2024 policy year, and the lowest in over 10 years. Most encouragingly, the level of attritional claims – those below US$500,000 – fell by over 10% against tonnage growth of almost the same percentage.

With one exception, no particular trends or emerging claims risks were noticeable to distinguish the 2025 policy year from previous years. The exception was an increase in claims for contamination to chemical cargoes, in many cases caused by failings in tank cleaning between cargoes. These often initially present as large claims, although salvage sales and treatment of the cargoes in question often mitigate the losses. Nevertheless, this is an issue that has the attention of the Club’s Safety & Risk Management division. The large claims experienced were a mixture of routine dock damage cases, collisions and, regrettably, avoidable illnesses and injuries. 

The Director’s Report for 2025 noted two major containership fires and commented on the challenges that these incidents pose in terms of ports of refuge and disposing of fire-damaged waste. One of these incidents involving a relatively small containership continued to develop during the 2025 financial year and resulted in costs of over US$100 million, albeit with strong prospects of a recovery from the ship’s charterers. Almost as soon as that incident was resolved, there was another major fire on a containership, this time entered in another IG Club, which ship found refuge in the same port as the UK Club’s case and incurred a proportionately similar level of costs.     

All of the cases are thought to have resulted from the carriage of undeclared dangerous goods, which is also likely to be the cause of a large claim against a charterer Member of the Club. It is perhaps therefore appropriate that the IG Clubs have made it a requirement in 2026 that their respective Members preserve rights of recourse for the carriage of undeclared dangerous goods in contracts for carriage, reflecting long-established principles under international conventions and national laws that a carrier should be compensated for losses where notice that the goods are dangerous has not been given. With that in mind, the February 2025 decision of the United Kingdom Supreme Court in the MSC FLAMINIA case expanding the scope of claims for which a charterer can limit liability was a disappointing one for shipowners. It has been argued that the case levels the playing field in terms of a charterer’s right to the full benefit of limitation. However, it also risks an innocent shipowner being left with unrecoverable losses in such cases and could enable the guilty shippers to evade the consequences of their actions 

The Club’s fixed premium book has performed well. Two large claims in particular have been mitigated by limitation, through the relatively small size of the ships involved. Encouragingly, against occasional concerns at the willingness of some courts to uphold the concept, three of the Club’s older claims were also successfully resolved through limitation, with claims presented often significantly in excess of the ships’ limitation fund. Some might question the role of limitations in the modern world. However, for the Club and the IGP&I generally, it remains a cornerstone of predictable and insurable risk enabling cost effective insurance.