Britannia Group will increase renewal rates by 7.5% for the 2025-2026 policy year as it responds to higher claims severity, which it said is affecting its financial performance, according to a report from AM Best.
The marine mutual protection and indemnity (P&I) club reported positive renewal activity for both owned and chartered tonnage for the current year, alongside some improvement in its underwriting deficit. However, Britannia noted that further adjustments will be necessary, continuing into the next renewal period.
According to a statement from the group, pool claims for 2024-2025 are higher than in the previous two years. While retained claims under $1 million remain within projections, claims valued between $1 million and $10 million have shown increased severity at the half-year mark. The group said this trend is expected to negatively affect its combined ratio for the year.
Britannia noted an increase in capital due to favorable investment returns but said it remains focused on balancing its underwriting position. The group plans to maintain its practice of tailoring members’ rates based on individual records and risk profiles, while also accounting for changes in the International Group of P&I Clubs’ reinsurance program.
For the 2025-2026 policy year, Britannia will seek an additional 2.5% rate adjustment from targeted remedial measures. It also plans to raise minimum deductibles for claims. Crew deductibles will increase to $10,000 from $7,000, cargo deductibles will rise to $22,500 from $19,500, and other claims deductibles will grow to $15,000 from $13,500. These adjustments reflect societal and claims inflation, according to the group.
In its freight, demurrage, and defense (FD&D) coverage, Britannia will remove the existing reverse deductible and cap, replacing them with a shared cost structure. Under the new model, members will bear one-third of total costs, while Britannia covers the remaining two-thirds, up to the policy limit.
The group stated its aim to achieve underwriting balance within the next two to three years, relying on a technical approach to secure sustainable premiums. Members’ FD&D rates will be adjusted based on individual claims histories and risk profiles to enhance pricing adequacy.
Additionally, Britannia announced an 18% capital distribution for mutual Class 3 members renewing on Feb. 20, 2025. This distribution, valued at $30 million, brings the total distributed to Class 3 members since 2017 to $160 million.
This move follows similar actions by marine mutual NorthStandard Ltd., which recently announced a 5% rate increase for certain classes, citing a return of larger claims exceeding $1 million after two years of relatively low claims costs, AM Best reported.
How will these rate adjustments and policy changes impact the marine insurance market? Share your thoughts below.
