A merican Club Circular No. 26/25 1 NOVEMBER 21, 2025 CIRCULAR NO. 26/25 TO MEMBERS OF THE ASSOCIATION Dear Member: BACKGROUND TO THE 2026 AMERICAN CLUB RENEWAL. DEVELOPMENT OF CLOSED AND OPEN POLICY YEARS. REQUIREMENTS FOR THE 2026 POLICY YEAR. The Board of Directors met in New York yesterday to review the current market conditions as well as specific factors as they relate to the financial performance of the American Club. This Circular advises on the decisions reached. Background to the 2026 American Club renewal As the 2025-2026 policy year progresses, the impact of large claims arising in the Pool as has been experienced over the past eighteen months remains a concern for the Club and indeed the broader P&I market. The risk landscape of elevated claims costs which was identified several years ago has proven to be the new norm. The Club’s dynamic approach to risk assessment has played a key role in managing the impact on direct claims, while the volatility with respect to larger casualties, especially at Pool level, continues to be challenging. Development of closed and open policy years Closed policy years The 2022-2023 policy closure required a modest deficit absorption into the contingency fund, while favorable development of claims within other closed policy years, in addition to allocation of positive investment performance, led to overall strengthening of the fund since year-end December 2024. Open Policy Years 2023-2024 This policy year remains in a positive surplus position as of September 2025. The release call margin for both the P&I and FD&D classes will remain at 15% over and above the total estimated premium for the year with an aim to close this policy year in the first half of the 2026 calendar year. A merican Club Circular No. 26/25 2 2024-2025 The 2024-2025 policy year was negatively impacted by reduced premium income, elevated reinsurance costs, two direct claims which have been notified to the Pool, and most significantly, the extraordinarily high level of claims assumed from the International Group of P&I Clubs, with the year marking the worst record in history for the Pool. While the policy year deficit will eventually benefit from the allocation of investment income, and carries conservative levels of IBNR with eighteen months of further development through to 2027, the Board has decided that, in line with prudent practices and regulatory responsibilities, the current deficit position warrants the release call margin for both the P&I and FD&D classes to be set at 35% over and above the total estimated premium for the year. 2025-2026 The 2025-2026 policy year is in its ninth month of development, and while direct claims experienced to date are within projections, with the most difficult weather period still ahead, it is premature to make predictions. The level of Pool claims is currently equivalent to the full 20232024 policy year declared levels with three months still ahead in this policy year. Encouragingly, premium is at a higher level than 2023 and 2024 with reduced exposure on a GT basis. The release call margin for both the P&I and FD&D classes will remain at 20% over and above the total estimated premium for the year. Release calls The current release call margins for open years are set out above. As to the factors supporting these decisions, the following are taken into account: premium risk, catastrophe risk, reserve risk, market risk and counterparty default risk, as well as the exposure of the Club g