SOMETIMES the only thing more expensive than being insured is not being insured.

Depending on how you itemise the cost centres, for most shipowners insurance is the second-largest outlay after crewing costs, typically accounting for 10%-15% of opex.

It’s always hard to itemise the bill in dollar terms, as there are so many variables involved, not least loss records.

But according to the Baltic Investor Indices, the all-in cost of insuring a capsize is pushing $250,000 a year, and the hit for a medium range tanker is well over twice that.

Some covers are optional, some are not. Protection and indemnity insurance — effectively the third party, fire and theft of the shipping world — is mandatory.

A so-called blue card, issued by a P&I provider as proof that cover for oil pollution liabilities is in place, is nothing short of a ticket to trade.

That brings us to the topic of this week’s podcast. The P&I niche is currently about half-way through the annual ritual known as the renewal round, the months leading to the traditional hard deadline of February 20.

By that point, 90% of the world fleet by tonnage will have renewed P&I policies with one of the 12 clubs affiliated to the International Group.

The period from late October to mid-December sees the marine mutuals that make up the IG set out their pricing policies for the year ahead.

At the time of recording, we were just over the half-way mark, with seven clubs having set out their stalls. All of them are demanding more money.

The silver lining here is that the rate of increase is slowing down. To date, three clubs have said they are seeking price rises of 5%, and a further four are looking for 7.5%.

That is only to be expected, being roughly in line with inflation in most Organisation for Economic Co-operation and Development countries. To put it another way, it is a lot less than the price increase you will have seen in your weekly grocery shop.

Coming after the 10% seen in 2021, 12.5% in 2022 and 10% in 2023, compounding out at around 46%, it is an indicator that clubs are on a surer financial footing than they have been for some time.

Another marked feature of this renewal round is an increase in cashbacks. P&I clubs are mutuals, making them an example of what economists call profit sufficers rather than profit maximisers.

If they do achieve an underwriting surplus and their free reserves pass a health check, they can decide to return some of that extra money to their money. Indeed, on one argument, they are duty bound to do so.

Three clubs have opted for some sort of capital return this year, with Gard, the world’s biggest P&I player, leading the way. Owners signed up with the Norwegians can look forward to a rebate of 10% of the past year’s premium, more than double the 5% target revenue increase.

Our insurance editor Dave Osler has done a back of an envelope calculation and has worked out that the sums involved run to more than $80m.

But is this really a random act of kindness? What is the catch? Why not just cut prices and have done with it?

These are the questions we put to our guests this week. They are:

• Jonathan Andrews, chief executive of Steamship Mutual

• Alex Vullo, a director of leading broker Gallagher

• Tom Bowsher, chief executive of West of England

• Thya Kathiravel, chief underwriting officer of Britain’s biggest P&I club, the recently merged NorthStandard