Clubs announce renewals success

Feb 28 2014

Several major P&I clubs have issued statements following renewals day on 20th February.

For example, the North P&I club said that it had achieved another solid year of development ending on 20th February 2014, further consolidating the club’s position as one of the largest and most financially secure members of the International Group of P&I Clubs, it claimed.

Owned tonnage entered in North increased from 126 mill GT at the 2013 renewal to 131 mill GT this week, while the club’s chartered entry developed to stand at about 49 mill GT.  

According to chairman Pratap Shirke, “Our policy of applying strict quality and financial standards to the membership continued at this renewal and I am pleased to report further satisfactory development, which will help preserve North’s financial strength. We were also delighted to welcome a number of new members to club.”

Joint managing director Paul Jennings said, “Owned tonnage increased by approximately 5 mill GT to 131 mill GT, a 4% rise in line with the overall increase in owned global tonnage over the last 12 months. With chartered tonnage expected to be approximately 49 mill GT, we are projecting a combined entered tonnage of 180 mill GT.”

Joint managing director Alan Wilson concluded, “Once again it has been a difficult year for global shipping. The slow recovery from the economic downturn, depressed freight rates and liquidity pressures mean our members continue to operate in uncertain and unpredictable environments.  We are extremely grateful to our members who have once again shown such strong support and confidence in our strategy of maintaining financial stability, while continuing to provide the highest levels of service in the most cost-effective manner.”

The UK P&I Club also announced another positive result with a net increase of a million gross tonnes of mutual business.

Mutual owned tonnage increased by 4% over the course of the 2013/14 policy year

Following this year’s renewal, combined mutual owned and chartered tonnage stands at 215 mill gross tonnes. The estimated increase of renewal premium was 7%.

For many UK Club Members, subdued earnings and a lingering shipping recession remain an unwelcome fact of life. However, UK Club premium needs to address underlying claims inflation, as well as a future pick up in claims frequency from what have been record low levels, the club warned.

Hugo Wynn-Williams, CEO of Thomas Miller P&I, the UK P&I Club’s managers, said: “It has been another good and solid renewal for the UK Club marked by continued controlled growth for a third year in succession whilst preserving a disciplined approach to underwriting.

“Gross tonnage has increased and we are pleased that our financial stability, claims management and service have attracted more tonnage from existing members and new business to the UK Club,” he said.

The UK Club said that it will be publishing a detailed report on its growth, together with the key financial indicators, in its ‘Review of the Year’ in May, as part of the usual package of year-end financial statements.

Oslo-based Skuld has announced 13% premium growth, following the P&I renewals.

The company said that it gained a significant amount of new business in the Far East, especially in China and Singapore, where Skuld established an office in 2012. Skuld also recorded solid growth in the Scandinavian and US markets.

During the policy year, Skuld said that it continued to execute its strategic growth plan with the launch of bespoke fixed-premium owners product generating a considerable amount of premium income. Other segments that continued contributing positively were offshore and charterers.

Skuld also continued its geographical diversification by entering into a long-term strategic partnership with Mitsui Sumitomo Insurance Company (MSI) to offer fixed premium insurance to the Japanese shipowning community.

Douglas Jacobsohn, Skuld CEO and president, said: "Continued profitable growth is a demonstration of the success of our long-term diversification strategy. We are pleased to see both geographical and product-portfolio expansion contributing according to plan. Skuld will continue to explore diversification opportunities in order to ensure we can offer innovative insurance products that meet the needs of our members and clients."

The London P&I Club said that it had increased its membership by almost 2 mill gt over the past year. This increase reflects the entry of further tonnage with the club by existing members and the addition of new members from China, Greece, Singapore, Turkey, and the UK.

Ian Gooch, CEO of the club’s management team, said: “The London P&I Club heads into 2014/15 after a solid renewal and further controlled growth. The club has seen encouraging progress, including continued steady growth in its mutual membership, which now stands at 43.1 mill gt.

“On the one hand, the renewal took place against a backdrop of depressed freight markets in many sectors. On the other hand, the increases in rates and deductibles applied by our underwriters were an important part of the ongoing work on our operating performance and consolidation of the club’s financial strength. These competing pressures contributed to the few cases where it ultimately proved impossible to agree terms, while in a few other cases the decision was taken not to offer renewal.

“The club is grateful for the support received from its members, and will strive to continue to provide a first-class, dedicated P&I service,” he concluded.

The New York-based American Club has also claimed very positive overall results for the renewals.

Tonnage entered for owners’ P&I risks increased by over 11% year-on-year as at the renewal date, while tonnage entered for defence risks grew by over 30%.

There was an overall premium increase of slightly under 8% for P&I on renewing tonnage, and nearly 6% for the club’s defence class.

However, when the monetary value of deductible increases and other adjustments to insurance conditions are taken into account, the target of a 10% increase in premium set by the club’s board for 2014 was very broadly achieved, notwithstanding a continuation of the difficult commercial environment, the club’s managers said.

In respect of new business, tonnage gained exceeded tonnage lost by just under a million tonnes. Taking this into account, as well as the increases on renewing tonnage described above, year-on-year annualised premium for the P&I class grew by just over 5%.

This is a very respectable figure given the effect of tonnage ‘churn’ during the 2013 policy year, which caused rates per tonne to continue a downward trend across the market as a whole, the club said.

Speaking in New York, Joe Hughes, chairman and ceo of SCB, managers of the American Club, said; “Against a background of only a faltering recovery for global shipping, the 2014 renewal was conducted under difficult business conditions. Nevertheless, it is pleasing to note that the club has made good progress in developing its tonnage and premium base across all its constituencies, welcoming several new members in doing so.

“The club remains committed to prudent underwriting, careful claims control and effective risk management for the benefit of all its members. It looks to the coming year with optimism, and is dedicated to providing the highest levels of service to its growing membership across the world,” he concluded.

(So who actually lost tonnage? – Ed)

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