P&I renewal season comes to an end

Feb 27 2015

Several P&I clubs have reported results of the renewal season which ended on 20th February.

For example, the UK P&I Club announced a net increase of 1.2 mill gt of mutual business taking mutual owned tonnage to 127 mill gt.

The UK Club’s combined mutual owned and chartered tonnage now stands at over 225 mill gt, an increase of more than 3% from 20th February 2014 – 20th February 2015.

For renewing business, the Club achieved a premium increase of 3.5% before terms. It also said that it was committed to maintaining disciplined underwriting, which has led to robust negotiations with those members who had poor records, some of whom chose to leave as a result.

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

“We are delighted by the interest shown in the Club, which was reflected by the 6.1 mill gt of new business which came into the Club during this renewal. The Club maintains its commitment to quality and declined to quote on over 2 mill gt of new business from more than 20 owners and charterers,” he said.

** The UK Defence Club, a provider of FD&D (legal costs) insurance announced gains of  4.8 mill gt on a net basis. Total insured owned tonnage now stands at 137 mill gt.

New members have joined from a variety of countries including Greece, Germany and the US.

Daniel Evans, UK Defence Club manager, said: “We are very pleased that following a 0% general increase and the introduction of continuity credits our commitment to reward members is already having a positive impact on the Club and helped achieve this strong result.

“The levels of new business which the Managers have been shown was significantly more than in previous years which is very pleasing and demonstrates that the Club’s  focus on FD&D and the benefits that our experience and expertise give to Members is gaining greater recognition,”he said.

**The North P&I club has emerged ‘significantly stronger’ from the 2015 renewal today, further consolidating its position as one of the most financially secure and largest members of the International Group of P&I Clubs, it claimed.

According to chairman Pratap Shirke, “We stated in November that maintaining the financial health of the club was imperative and would be the fundamental objective of the 2015 renewal. We set a target increase in mutual premiums of 4.75% and I am delighted to report that - thanks to the overwhelming support of our members - we have successfully achieved this.”

North said that it had adopted a robust but consistent approach to meeting its financial objectives. This meant not offering renewal terms to some members, due to irreconcilable concerns over their technical and claims performance and not agreeing renewal terms with members with poor claims records who were not prepared to make a fair financial contribution to the club.

“As a result, our owned tonnage has dipped to approximately 127 mill gt and chartered tonnage has reduced to approximately 40 mill gt,”said Shirke. “But importantly, our financial position is significantly healthier without the adverse impact of a number of poorly performing former members, and we remain a major force in the International Group with 12% of total owned tonnage.”

North secured an ‘A’ stable credit rating for the 11th consecutive year last month from leading ratings agency Standard and Poor’s.

In particular, the agency confirmed that North’s merger with Sunderland Marine in February last year supports its already strong market position. “A combined North and Sunderland Marine has a strong competitive position in our view, mainly stemming from North's strong market position within the International Group of P&I Clubs,”the agency said.

North has also produced a quick reference guide aimed at simplifying European Union and US sanctions legislation governing what can and cannot be shipped in and out of Iran.

“Current EU and US sanctions against Iran are incredibly complex and change frequently. They are a source of great confusion for shipowners and operators, who need to take great care when considering whether or not it is lawful to ship a particular cargo to or from Iran,” said North’s deputy director, Mark Church.

The ‘Iran Sanctions Quick Reference Guide’ should be read in conjunction with North’s ‘Iran Sanctions Loss Prevention Briefing’, both of which can be accessed via the Iranian sanctions area of the club’s website. The website also contains new and updated briefings on Syrian and Russian/Ukrainian sanctions.

**The Standard Club said that it had met its targets for the 2015-16 P&I renewal. 

The overwhelming majority of members that were offered terms renewed with the club and the club met its premium increase targets. 

Insured tonnage is 135 mill gt, representing a 3% increase over the policy year.  Eight new members joined the club and a significant number of members increased their entry, both at 20th February and in committing tonnage as their ships are delivered during the year. 

As expected, the club decided not to offer renewal terms to a small number of members who did not meet the club’s quality and rating criteria. As a result, tonnage declined by around 3 mill gt at renewal.

The club said that it anticipated its tonnage growth during the 2015-16 policy year will more than offset this reduction.

Jeremy Grose, Charles Taylor & Co CEO, manager of The Standard Club said: “The Standard Club has achieved a very strong renewal, in line with our expectations.  The club’s strategy is to achieve long term growth based on the twin principles of high quality membership and financial security for members.

“We worked hard to achieve the premium increase we were targeting to ensure long term security for members.  Although this has meant that some members have had to accept increased levels of premiums, we have also seen a welcome trend with some members accepting higher levels of risk retention to mitigate premium increases.

“I am also very pleased to welcome eight new members to the club. This new membership, and the commitment to new tonnage from existing members, is a strong endorsement of the club’s proposition to both current and prospective members.

“The club has had a very good year with our focus on underwriting discipline, high levels of professional service and technical advice, our loss prevention activity and highly effective claims management all contributing.  We expect free reserves to increase at the year end, to another record level for the club.  We saw a welcome reduction in claims in the second half of the 2013-14 policy year, which has contributed to our strong financial position,”he said.

In addition,The Standard Club Asia Ltd (Standard Asia) has launched a new Singapore War Risks Mutual (SWRM) Class. 

This is the first Singapore-based national mutual war risks insurance and is fully supported by the Singapore Shipping Association (SSA).

Patrick Phoon, president of the SSA, said, “The idea was first mooted by the SSA with the aim of strengthening Singapore’s offerings in the marine insurance sector to boost our status as an international maritime centre. Having invested a lot of time and effort on this project, I am pleased to see its fruition – Singapore now joins the ranks of other leading maritime nations to have its own dedicated war risk facility. Our shipowners will get to benefit from flexible coverage and more control over their war risks insurance cover at competitive rates.”

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