KP&I outlook revised as underwriting volatility concerns resurface

KP&I reported a net loss of $5.4m last fiscal year.

Korea P&I Club’s (KP&I) will likely face heightened pressure on its operating performance following a net loss in 2024, AM Best said.

The outlook revision reflects concerns over underwriting volatility after KP&I reported a net loss of $5.4m (KRW7.3b)in 2024, driven by two exceptionally large claims. 

The combined ratio reached 204% for the year, significantly above AM Best’s expectations and well above peers. 

The Club’s five-year average combined ratio (2020–2024) stood at 139.5%, indicating persistent volatility and a structural vulnerability due to its small premium base, high net retention, and a commission scheme sensitive to claims performance.

Despite these challenges, AM Best noted that KP&I’s recent underwriting restructuring has helped reduce exposure to high-severity losses. 

Claims experience, excluding the two large events in 2024, has improved since 2023.

However, the agency expects that these changes will take time to deliver consistent improvements in underwriting performance.

Looking ahead, KP&I’s outlook will depend on its ability to stabilise underwriting results and demonstrate the effectiveness of its recent risk mitigation measures.