JLT asks clubs what trends they have seen in claims patterns (part 2)

In its 2017 report on the P&I Clubs, broker Jardine Lloyd Thompson asked all of the clubs a list of questions. Here are the responses of Japan Club, London Club, North of England and Shipowners’ Club to one of those questions. Over coming days IMN will be printing in turn the responses of the other P&I Clubs.

Question: While the P&I claims pattern seems benign at present have you identified any trends or potential trends that give you cause for concern?

Japan Club

The trend towards ever-larger ships leads to higher claims amounts when accidents occur, said the Club, adding that more claims might be reported as environmental regulations increased.

London Club

London Club said that its claims review of 2016/17 noted an increase in the number of General Average & Salvage files attributable to engine room problems, principally main engine breakdowns. The Club said that, although the claims arising were modest, it believed that this was at least a potential trend. The Club has been undertaking a more detailed review of the causative factors in each case.

North of England

North said that its benign claims experience in 2015 continued during the first half of 2016, but there was then an increase in the number of high value claims (in excess of $1m) in the second half of the year, so that, in the end, the 2016 Policy Year was a more “normal” claims year.

The Club noted that the number of attritional claims (below $1m) had been falling over the last few years, in line with the general benign trend experienced by the other clubs. The Club’s concern was that the shipping recession had endured for almost 10 years now and, as insurers, North needed to be aware of the impact that this might have on shipowners’ operating performance, their standards of maintenance and their ability to recruit, retain, train and develop the right quality of crew.

The Club said that these challenges would vary from sector to sector and, as insurers, it needed to be vigilant and to spot the trends that would ultimately result in claims.

North concluded that, while less intensive trading would have assisted in allowing for the generally benign claims environment of the past few years, “we all anticipate rising claims once freight markets eventually improve”.


Shipowners’ Club said that in its own specialty, the small ship sector, wreck removal remained the most significant issue in pushing up claims costs, both now and in the future. The Club noted that smaller vessels operating in a coastal environment had a much greater propensity to run aground and potentially become wrecks. The costs of such claims had risen significantly over recent years and it was now rare to be able to leave wrecks where they were, the Club said.

Shipowners’ also observed that the cost of crew claims continued to escalate. It referred to “a worrying trend” that crew claims, previously covered through government workers compensation schemes, were now coming back to shipowners, with governments seeking recourse against owners for claims made under compensation schemes plus additional enhancements in tort. This, it noted, had been particularly prevalent in Europe.