Protection and indemnity combined ratio drops to 96% in 2023/24

The year was dominated by the Dali incident, which occurred in March.

The protection and indemnity (P&I) insurance 2023/24 policy year market average market combined ratio improved to 96%, down from 99% the previous year, according to WTW.

Kim Wood, associate director of WTW’s P&I team, shared on the podcast  “Global Marketplace Insights – Marine Q3 2024” that average market investment income reached 6.6%, recovering from prior losses. These positive results drove free reserves up by 15%, signalling one of the market's strongest positions in years.

The year has been dominated by the Singaporean container ship company, Dali, incident, where it collided with the Baltimore Bridge in March. 

This tragedy, which caused six fatalities and the bridge's collapse, is expected to generate one of the largest P&I claims in history. 

Estimates suggest the claim may rival the $1.5b payout from the Costa Concordia disaster in 2012.

Whilst the Dali incident overshadows the year, the P&I market remains robust. The claim will likely lead to higher reinsurance costs and premium increases, but these are manageable within the industry's capacity. 

Beyond this, nine additional pool claims in the first half of 2024 exceed recent averages, signaling heightened large-claim activity this year. 

Preliminary mid-year data from a third of the international group P&I clubs revealed mixed financial results, with combined ratios ranging from 90% to 110%, underscoring variability in claims exposure. 

This variability is expected to shape renewal discussions in the months ahead.