It seems to be report season! In recent weeks, I have been bombarded with a plethora of them reaching my inbox, more than seems normal for this time of the year, from recollection. Sadly, like you, I cannot make the time to read and digest them all. But out of a sense of courtesy and duty, knowing how much time, effort and money have gone into resourcing and publishing them, I do scan-read the most relevant ones, and occasionally I am rewarded for my patience with some essential nuggets of learned wisdom.
One such recent report that grabbed my attention was the P&I Market Review 2025, produced by Lockton Marine. It offers a deep dive into the current status of the various P&I Clubs, which is of interest. But it was the narrative in the attached press release to promote the Review’s launch that really hit home. It informs readers that the 2024/25 policy year saw the clubs report a collective underwriting loss of $312m, reversing two years of surpluses and resulting in a net underwriting loss of $98m over the past three years.
It went on to say that P&I claims hit a ten-year peak with fires and EV cargo emerging as new flashpoints for shipowners. Net claims reached $3.1bn, – wow, yes, a staggering sum – up 25% year-on-year and 16% above the five-year average. Several clubs have pointed to the rising threat of ship fires as an increasing driver of major losses. This reflects both the risks of an ageing fleet and the growing prevalence of mis-declared or hazardous cargo, including electric vehicles. In addition, inflationary pressure on materials and labour, combined with greater damages arising from modern port upgrades, continues to drive up the cost of claims.
Pool claims make 2024/25 one of the worst years on record – and the true cost may be even higher, meaning 2024/25 is on course to be one of the worst pool claim years on record.
This is all rather depressing; but like me, perhaps you are not entirely surprised to hear this news. The major incidents and accidents, the type of which are referred to in the report, have been well documented in the shipping media. Only now is the true cost to insurers becoming known. And it does not take a mathematical genius to understand this situation is not sustainable at this level going forward. You can access the Lockton Marine report elsewhere in this news bulletin and draw your own conclusions.
The other topic I wanted to share with you this month is a hugely controversial one that stops me in my tracks. It surrounds decarbonisation, something of a buzzword, and potentially one that might lead me into slightly murky waters! I need to be careful not to get into political machinations, for as you know, IIMS is a strictly non-political organisation. But the comments made by ABS Chairman and CEO, Christopher Wiernicki at the recent London Shipping Week were certainly thought-provoking and are worth digesting. In his address, he issued a stark warning that the International Maritime Organization’s (IMO) net zero framework is moving faster than the realities of shipping can cope with and manage. He has urged regulators to pause and reconsider their approach.
Gosh, that’s a bolt from the blue and a serious statement of intent from a highly respected leader of an influential organisation.
Continuing, he said, “Shipping and the IMO are on different trajectories. There is no clear pathway for green fuel availability, scalability and infrastructure support. LNG and biofuels are mission-critical to any success and should not be overlooked, over-penalised or discarded in the Net Zero regulation. Quite frankly, achieving net zero for shipping by 2050 looks like a wildcard.”
Is he right? Are his comments valid? It is not for me to comment particularly on Wiernicki’s thoughts, rather only to put the information before you. But what does this mean for decarbonisation in shipping, and will anyone heed Wiernicki’s comments, or will it fall on deaf ears? And what do other industry ‘movers and shakers’ think? I pose more questions than there are answers for currently, I know. At the time of writing, I have been unable to find any response or comment from IMO. But you know things are serious when the head of ABS raises his head above the parapet to make such an observation.
And finally this month, I had the absolute pleasure to spend time in Hamilton, Ontario with members and others from the North American maritime world at the IIMS Canada Conference 2025. Not since before the pandemic have we hosted such an event in Canada. The conference attracted some top-notch speakers from across the country. We also managed to squeeze in a conference dinner as well. My thanks to the IIMS Canada committee for their hard work to organise the event, and to all those who either presented at the conference or attended in-person or online.
Survey well.
Mike Schwarz