Protection and indemnity clubs recorded a nearly break-even underwriting year despite record levels of claims, London-based Willis Group Holdings P.L.C. said in a report released Tuesday.

The marine liability mutual insurers that make up the International Group of Protection & Indemnity Clubs recorded an underwriting deficit of 1% for the 2009-2010 financial year, according to “Willis P&I Market Review 2010/11.”

The 1% underwriting deficit was achieved despite a 12.5% increase in claims, the highest in the market’s history, according to the report.

“After one of the worst years on record, the P&I market made a spectacular comeback in 2009/10 with total assets and free reserves representing all-time record highs for the International Group,” Ben Abraham, head of Willis’ P&I division, said in a statement.

“In contrast to this positive news, claims are similarly at an all-time high, worryingly not due to a surge in very large claims, but to the increasing cost of more routine claims,” Mr. Abraham said.

Investment income in the clubs surged to $680 million in the most recent year after record losses of $840 million the previous year, the report stated.  Rate increases for shipowner members of P&I clubs are unlikely to exceed 5%, according to a separate analysis released in October.

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