NorthStandard has announced a 5% increase in Protection and Indemnity (P&I) premiums for the marine insurance year commencing 20 February 2026. The decision reflects ongoing market volatility and risk factors.
The global marine insurance provider anticipates an increase in premium income for 2025-26, alongside improved investment returns, higher reserves, and continued diversification success. However, NorthStandard considers a modest premium rise for 2026-27 essential given the current risk environment.
S&P Global rating and financial projections
NorthStandard projects a premium income of US$930 million for 2025-26 period
Eight months into the current insurance year, NorthStandard projects a premium income of US$930 million for 2025-26 period, compared to US$886 million the previous year.
Free reserves are expected to reach US$900 million, up from US$800 million. Forecasts suggest investment returns will surpass 6%, an increase from 5.9% in 2024-25 period.
NorthStandard maintains an S&P Global ‘A’ rating, with stable AAA capital strength, allowing the allocation of more funds towards growth assets.
Claims environment and insurance strategy
Despite a relatively benign claims environment compared to a high number of claims referred to the International Group (IG) pool last year, NorthStandard emphasises the need for caution.
Chair Cesare d'Amico noted the satisfactory performance of NorthStandard’s investments, essential for financial stability and strong underwriting.
"NorthStandard's investments continue to perform, which is both good for our balance sheet and necessary to maintain our robust underwriting position," said Cesare d’Amico. Large claims remain significant despite fewer numbers, with expenses continuing to rise.
Challenges and strategic diversification
NorthStandard forecasts a combined ratio of 104% by year-end, 10% lower than 2024-25
NorthStandard forecasts a combined ratio of 104% by year-end, 10% lower than 2024-25, supported by favourable conditions in retained claims.
Geopolitical disruptions affecting trade lanes influence routing decisions and contract terms, while low scrapping rates and complex claims, like ship fires, add unpredictability.
Marine & Energy Liabilities portfolio
Managing Director - Jeremy Grose highlighted the importance of strategic diversification.
"This year’s cautious outlook provides further evidence of the logic behind our unfolding strategy of diversification," stated Jeremy Grose.
The company has introduced a Marine & Energy Liabilities portfolio following member and broker feedback, building on strengths in Offshore & Renewables P&I, and launched a combination Hull & Machinery and P&I product.
Concluding strategy and future outlook
Paul Jennings, Managing Director, reiterated the commitment to financial discipline alongside ambitious growth.
"We will continue to develop with ambition, while maintaining the financial discipline and long-term thinking to underpin our enduring success," commented Paul Jennings.
The current situation, though positive so far, remains unpredictable concerning large claims. Jennings views the premium increase as evidence of the Club's successful 2023 merger, ensuring prudence protects Members and secures a robust underwriting position.
NorthStandard has advised Members of a 5% increase in P&I premiums for the marine insurance year, starting 20 February 2026, to reflect ongoing market unpredictability and risk.
The global marine insurer projects a rise in premium income for 2025-26, as well as better returns on investments, higher reserves, and continued success for its diversification strategy. However, it believes a modest increase for 2026-27 is prudent in the current risk environment.
S&P Global ‘A’ rating
Based on its position eight months into the insurance year, NorthStandard projects premium income of US$930 million for 2025-26 against US$886 million in the previous year, and free reserves of US$900 million (US$800 million). Investment returns are currently predicted to rise to over 6%, up from 5.9% in 2024-25.
The Club maintains its S&P Global ‘A’ rating, with capital strength remaining ‘Stable AAA.’ Its improved capital position has also allowed it to allocate more money to growth assets within the investment portfolio. While the claims environment is also relatively benign compared to last year’s large number of claim referrals to the International Group (IG) pool, the Club nonetheless believes caution is essential.
NorthStandard’s investments
“NorthStandard’s investments continue to perform, which is both good for our balance sheet and necessary to maintain our robust underwriting position,” commented Cesare d’Amico, Chair, NorthStandard.
He adds, “However, a better claims scenario this year must be seen against a background of inflation and volatility. And whilst the claims on the IG so far are fewer, they are once again very large, and the pattern of large claims costing more continues.”
Inevitable consequences for routing decisions
Based on favourable conditions in its retained claims, NorthStandard projects a year-end combined ratio of 104%, which is 10% lower than 2024-25.
However, geopolitical-driven disruption to major trade lanes continues, with inevitable consequences for routing decisions and contract terms, while scrapping rates remain subdued. Ship fires and other complex claims also bring unpredictability.
Unfolding strategy of diversification
“This year’s cautious outlook provides further evidence of the logic behind our unfolding strategy of diversification,” commented Jeremy Grose, Managing Director, NorthStandard.
He adds, “Our specialty lines are delivering positive performance across the board. Their average combined ratio of under 90% over a five-year period is strong proof of their contribution to our continuing financial resilience.”
New Marine & Energy Liabilities portfolio
Further strategic initiatives this year have included the Club’s launch of a new Marine & Energy Liabilities portfolio in response to feedback from Members and brokers. Building on its established strength in Offshore & Renewables P&I, the new line provides liability cover beyond traditional P&I.
The Club also launched a Hull & Machinery and P&I product to leverage its Sunderland Marine expertise and wider Coastal & Inland capabilities in a combined product offer.
Current risk scenario
“We will continue to develop with ambition, while maintaining the financial discipline and long-term thinking to underpin our enduring success,” commented Paul Jennings, Managing Director, NorthStandard.
He adds, “The current risk scenario is not a perfect storm by any means, and the year-to-date is encouraging, but large claims remain inherently unpredictable. Our modest premium increase requirements this year are further vindication of our successful merger in 2023. In the interests of protecting our Members, we meet uncertainty with prudence to ensure that our underwriting position remains robust.”
