The 2021 Marsh Protection and Indemnity Clubs: Financial Review 2021 examines the case for and against general increases by the protection and indemnity (P&I) clubs. The use of general increases to raise premiums is deemed by most P&I clubs to be an essential part of their mutuality.
We analyse this one-size-fits-all approach to help P&I club members facing the prospect of premium increases to understand the arguments on either side of the debate.
Marsh approaches this debate from our position as a long term proponent of fair P&I rates; P&I club members should pay premiums that are a reflection of the risk they represent individually plus a reasonable contribution to the shared costs of the club or clubs of which they are members. In our opinion, there is no case for any kind of additional levy as a contribution towards surplus capital (for reasons we examine in our report). However, most of the clubs still favor the approach of asking members to pay general increases.
In addition, the report consolidates the financial data for the International Group P&I club market as a whole, and provides analysis of the individual mutuals based around key financial and business metrics.