P&I clubs to merge - renewal results

Feb 26 2016

The Britannia and UK P&I Clubs have confirmed that they are seeking to merge.

The boards of each club are to begin a process to determine whether the merger is possible and delivers appropriate benefit to their respective memberships, the clubs said in a statement.

Ultimately, the decision on whether to proceed with a merger will be decided by the members at special general meetings to be convened later this year.

Their respective managers, Thomas Miller and Tindall Riley, both providers of insurance and professional services, would also merge should the clubs decide to join together.

According to insurance brokers Tysers, quoted in ‘Maritime Advocate’, a merger would create a club with nearly 250 mill owned gt and around 125 mill gt of chartered tonnage. Its free reserves would exceed $1.1 bill.

The consolidation is expected to produce economies and other benefits of scale for the members.

At the 20th February renewal date, the UK P&I Club experienced a net gain of 4 mill gt entered, it claimed.

A year-on-year net increase of 8.5 mill gt of mutual business takes mutual-owned tonnage to around 135 mill gt, an increase of about 6.5%

The club’s combined mutual-owned and chartered tonnage now stands at more than 225 mill gt.

Hugo Wynn-Williams, CEO of Thomas Miller P&I, the UK P&I Club’s managers, said: “I am pleased to be able to report that we have achieved a fifth consecutive year of growth, while maintaining our disciplined approach to underwriting. Interest in the Club has been very strong this year, based on its high standards of service and commitment to quality.”

The North P&I Club said it was stronger after the annual renewal on 20th February, 2016.

According to chairman Pratap Shirke, “As part of North’s ongoing strategy to refine its membership, coupled with the very challenging trading environment for our members, it was inevitably going to be a tough renewal. However, I am pleased to report we have increased our owned tonnage year-on-year by 4% to 131 mill gt and we continue to achieve our strategic objective of growing in line with world tonnage.”

Joint managing director, Alan Wilson, said, “While we are always prepared to make strong financial decisions to safeguard the interests of the club, this year – helped by a projected $40 mill financial year surplus – we have been able to moderate our renewal requirements to assist members during these very difficult shipping markets.”

Joint managing director, Paul Jennings, said, “We would like to thank the overwhelming majority of our members for their continued support. Our members renewed because of the high levels of service provided and because we are responsive to their needs in the current economic climate.”

Gard P&I said that the 2016 renewal took place against a background of challenging macro-economic conditions, as well as a highly competitive insurance market.

However, this renewal was a positive one for Gard – both in terms of achieving sustainable premium levels and tonnage growth, the club said.

The general premium increase was partially offset by lower reinsurance costs, but a modest increase on retained premium is essential to deal with the effects of claims inflation and these were distributed equitably depending on claims performance and individual risk profiles.

In the mutual market, Gard saw an increase of around 2.8 mill gt at the 20th February renewal, bringing the total tonnage increase in the last 12 months to 10.7 mill gt.

This growth has come both from a number of high quality owners moving vessels to Gard for the first time, as well as existing members moving more of their fleet to the club.

The development was well spread geographically, reflecting the club’s global presence and the close collaboration between the teams in offices worldwide.

The London P&I Club said that it had seen further growth in its owners’ tonnage, in addition to strong growth in its charterers’ business book. 

Ian Gooch, CEO of the club’s management team, said, “The recent renewal was particularly challenging for a number of reasons, including the depressed trading conditions in many sectors.

“A key part of our strategy involves work to strengthen the club’s long-term technical performance, and the renewal saw some especially intense dialogue and detailed analysis of loss records and risk exposures with members and brokers.

“It was also the case that, for various reasons, terms were not agreed with some members. But there were also good opportunities to attract additional entries from existing members, and we were pleased to welcome a number of new members to the club as well. 

“The overall result is that the club achieved further controlled growth in its owners’ entry of around 1.5% on the position 12 months ago. We were also pleased to see growth in the club’s charterers’ entry during the 2015/16 year and especially at the recent renewal, including new entries from a number of European and Far East-based charterers,”  he said.

Ahead of the 20th February, 20, renewal date, the Swedish Club said that its numbers will be on a par with last year, in line with its policy of balanced growth and solid performance.

It was anticipated that gross tonnage could post a 5% increase in this policy year in addition to the 8% growth experienced in 2015. This comes on the back of an announcement by the Club at the end of last year of a 0% general increase for 2016, a move which further supported the balanced approach adopted by the club in the midst of an uncertain global shipping market.

Lars Rhodin, The Swedish Club managing director, said: “We are pleased to see renewal results in line with our expectations and thank our members and clients for their continued support. The Club remains committed to its policy of quality growth, and our mission of offering expert assistance in managing current and future risks remains at the heart of everything we do.” 

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