P&I Clubs face $98 million loss due to rising lithium battery fire claims, prompting rate hikes and higher deductibles, reports Seatrade Maritime News.
Marine mutual insurers are facing mounting claims from lithium-ion battery fires, pushing P&I Clubs into a net underwriting loss of US$98 million over the last three years, reports UK's Seatrade Maritime News.
The surge in claims has triggered general rate increases of 5-8 percent and higher deductibles as the new P&I policy year begins. Conventional shipboard firefighting systems are not designed to tackle lithium battery blazes, with electric vehicles identified as a key risk area.
US-based broker Lockton stated that pool claims in the $10-100 million band recorded one of the worst years ever. Back-year deterioration could push claims for 2024-25 to about $775 million. Net claims reached $3.1 billion, up 25 percent year on year and 16 percent above the five-year average.
Lockton noted that fires and EV cargo are emerging as major flashpoints for shipowners, alongside risks from ageing fleets and mis-declared hazardous cargo. Rising inflation, port upgrade damages, war-related incidents in the Red Sea, re-routing via the Cape, sanctions, and tariff costs have also contributed to higher claims.
