Gallagher's 2027 P&I General Increase: 2.5% to 5%, With the Container Rate Up 42%

Gallagher Specialty's P&I Mid-Year Review, published 4 September 2026, gives its 2027 prognosis in one line: "2027 General Increase range 2.5% to 5%." A separate bullet in the same list reads "Reinsurance rates likely to increase with a focus on the FCC category," and carries no percentage. Between them sits an MV Dali loss the review calls "likely to exceed the current level of USD2.8b currently reserved."

Those two lines sit apart because the two charges are collected separately. A general increase applies to a member's estimated total call, quoted before the International Group excess loss rate adjustment. The Group's rate per gross ton is billed alongside it on its own annual schedule, and for container tonnage it has risen 42.1% across two renewals.

Key Takeaways

2.5% to 5% is Gallagher's forecast range for the 2027 general increase, a charge on members' estimated total call. Its separate bullet on reinsurance rates carries no percentage and points only at the fully cellular container category.
Every International Group GXL layer renews subject to free and unlimited reinstatement and full follow terms, so a tower-consuming loss triggers no reinstatement premium and costs the Group no capacity for the balance of the year.
USD 1.0237 per gross ton is the 2026/27 container rate, up from 89.03 cents for 2025/26 and 72.04 cents for 2024/25. Containers were the only category to rise this year; persistent oil tankers fell 8.0% and passenger 8.5%.
Steamship took 8% and the UK Club 7.5% at February 2026, while five clubs declined to post a general increase at all and targeted 5% to 8% on expiring terms. Gallagher's 2027 range sits below almost all of it.
All twelve clubs approved interim funding in June 2026 after one reinsurance group missed its payment deadline on the Maryland settlement, leaving Britannia short. Payment was agreed in full by 25 August.

Seven General Increases, Five Targeted Adjustments

Marsh's general increase table for February 2026 shows seven of the twelve International Group clubs announcing one: Steamship at 8%, the UK Club at 7.5% on P&I, and Japan, NorthStandard, Shipowners', Swedish and West of England each at 5%. Five declined to post a general increase and set a target on expiring terms: American at 8% overall, Skuld at 7.5% on premium rates, London at 6% on average rates, Britannia at a 5% minimum on expiring estimated total call, and Gard at an average 5% against a 10% owners' general discount.

Gallagher's 2.5% to 5% range for 2027 therefore sits below almost every figure the membership was charged at the last renewal, and it follows a year in which the underlying result improved. Group-wide, 2025-26 produced a USD 250 million underwriting loss on an average financial year combined ratio between 105 and 108%, a 28% improvement on the prior year's USD 352 million deficit and 110%. Investment income added some USD 1,125 million, free reserves reached about USD 6.8 billion after an USD 850 million rise, and Pool retained losses ran a shade over USD 300 million.

One line in Marsh's own table governs how every percentage in it should be read. Its stated basis is "Percent changes in estimated total call (ETC), before application of International Group Excess Loss Rate adjustments." Group excess-of-loss cost therefore sits outside the general increase and reaches the member as a separate rate per gross ton.

Free and Unlimited Reinstatement, Then the Bill by Gross Ton

The Group's 2026/27 structure runs in fixed steps. An individual club retains the first USD 10 million of a claim. Claims are then pooled between the Group Clubs for USD 90 million excess USD 10 million, with Hydra, the Bermuda segregated-accounts captive holding a cell for each of the twelve clubs, reinsuring the Pool above USD 30 million and carrying a USD 103.6 million annual aggregate deductible inside Layer 1. Above USD 100 million the collectively purchased GXL responds in three layers totalling USD 2.25 billion, and a USD 1 billion Collective Overspill attaches at USD 2.35 billion.

Reinstatement terms decide what a tower-consuming loss costs the Group in the year it happens. Each GXL layer renews "subject to free and unlimited reinstatement and full follow terms", saving only the aggregate limits carved out for malicious cyber and pandemic. No reinstatement premium falls due, and the cover restores itself for the balance of the policy year. So the treaty carries no mechanism for the market to recover a large loss from the clubs during the year they claim it.

Recovery arrives at the next annual repricing of the rate per gross ton, and the container series shows it arriving. For 2024/25 the Group set the fully cellular container rate at 72.04 cents per gross ton, a 1.0% cut announced on 19 December 2023 in a renewal Mike Hall presented with all vessel types seeing rate reductions. That rate took effect on 20 February 2024, five weeks before the Dali struck the Francis Scott Key Bridge.

Two renewals later containers stand at USD 1.0237, having gone through 89.03 cents at plus 23.6% and then a further 15.0%, a cumulative rise of 42.1%. For 2026/27 containers were the only category to move up at all: persistent oil tankers came down 8.0%, dry 5.0%, passenger 8.5%, and clean tankers renewed flat.

International Group excess-of-loss rate per gross ton, by tonnage category
Tonnage category	2024/25	2025/26	2026/27	Two-renewal change
Persistent oil tankers	$0.6163	$0.6258 (+1.5%)	$0.5758 (-8.0%)	-6.6%
Clean tankers	$0.3982	$0.4337 (+8.9%)	$0.4337 (nil)	+8.9%
Dry	$0.5863	$0.6054 (+3.3%)	$0.5751 (-5.0%)	-1.9%
Fully cellular container	$0.7204	$0.8903 (+23.6%)	$1.0237 (+15.0%)	+42.1%
Passenger	$3.3842	$3.4390 (+1.6%)	$3.1472 (-8.5%)	-7.0%

Rates and annual percentage changes as published in the International Group's GXL renewal announcements; the 2024/25 and 2025/26 schedules were issued in US cents per gross ton and are shown here in dollars. Two-renewal change computed from the published rates.

The Dali measured 95,128 gross tons. At the 2026/27 container rate that tonnage attracts about USD 97,400 of Group excess-of-loss charge; at the 72.04-cent rate in force on the night of the allision it attracted about USD 68,500. Roughly USD 28,900 a year more on one hull, none of it inside any general increase.

Gallagher's analysts described the change in pricing basis directly: "The prospect of a loss to these higher layers is no longer theoretical but is a reality, and so the basis for pricing has a benchmark instead of being more driven by the cost of capacity."

The Recovery That Missed Its Deadline

The International Group's own Baltimore statement, issued 17 June 2026, records what happened when the money had to move. Britannia, the Dali's club, paid the State of Maryland on behalf of its members under the USD 2.25 billion settlement. A shortfall then arose: one reinsurance group reserved its position and failed to pay its shares in line with the payment deadlines the settlement set. Britannia considered that group in breach of its policy obligations and said it was taking all steps available to enforce its entitlement.

What filled the gap came from the membership. An interim solution to fund the shortfall was approved by all clubs within the International Group, which let Britannia satisfy the agreement to the State's satisfaction. The Group's 25 August 2026 update reports the shortfall agreed in full by the reinsurance group in question, with all markets paid. Between the two statements, a collection failure on one club's reinsurance sat as a proportionate obligation on eleven clubs with no connection to the casualty.

A mutual buying its excess of loss collectively converts a counterparty problem into a mutualised one. Where a commercial cedent facing a reinsurer that reserves its position carries that credit exposure alone, the Group's single placement put the shortfall on the whole membership at once, on a deadline the plaintiff had written.

Gallagher's own forecast already carries that unevenness. Its overspill bullet allows that a potential overspill could be absorbed by the IG Clubs proportionately, "but with some Clubs being more able to perform than others". The layer where that would happen is the one part of the programme carrying a paid reinstatement: the Collective Overspill renews with a single one, against the free and unlimited reinstatements on every GXL layer beneath it. Gallagher's review says the Dali is "likely to exceed" USD 2.8 billion, and the June shortfall was one settlement of USD 2.25 billion on a tower that had already paid.

Gallagher's 2027 P&I General Increase: 2.5% to 5%, With the Container Rate Up 42%

Key Takeaways

Seven General Increases, Five Targeted Adjustments

Free and Unlimited Reinstatement, Then the Bill by Gross Ton

The Recovery That Missed Its Deadline

Further Reading

Sources