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ADDITIONAL CURRENT TALKING POINTS:
•Mutual Clubs diversification into non P&I business- good, bad or necessary development to keep the
rating agencies happy?
•Maritime legislation- ever growing burden on ship owners leading to increase risk to P&I insurers. For example:
* Nairobi Convention- Wreck Removal
* IMO SOLAS- Bulk liquid blending prohibited
* Athens Convention- Passenger Liability increases
* LLMC- 50% increase in limit of liability
•World fleet capacity growing with new buildings exceeding scrapping- continued pressure on freight rates.
•Power of Club Letter of Undertaking.
•Shortage of skilled crew members.
•Sharing of statistics between Clubs would this be a useful development!
•Better incentives for ship owners with good records.
•MLC- unpaid crew wages an issue for Clubs to address, but outside of Pooling arrangement!
•Expect downward trend in Release Call percentage to continue.
•What Rules? Hamburg, Hague, Hague-Visby, now Rotterdam Rules.
•IG Club free reserves now exceed USD 4 Billion.
•Trade Sanctions ever increasing problem for owners and insurers alike.
•Container Vessels – Wrongly declared cargo serious ongoing problem – Calcium Hypochlorite for example.
For ship owners and P&I brokers, there are five
seasons in a year!! Spring, Summer, Autumn,
Winter and more importantly the P&I renewal
season. The P&I renewal season can encompass all
the elements of the other four seasons, being the high
and low depressions of P&I renewal negotiations.
The P&I renewal season will soon be upon us and
it is again the time of the year for the annual check-
up of the wellbeing of the P&I insurance market
and this we do, in the form of the 8th Omni P&I
Report on the state of the market for both Mutual
Clubs and Fixed premium facilities, the two distinct
markets.
The International Group of 13 Mutual Clubs is in
all probability going to again prescribe the bitter pill
of general increases, which in turn might lead to more
vessels moving between the clubs.
Let us hope that the benign claims experience of
the clubs results in a corresponding benign general
increase. This coupled with increased profitability
for the year ending 20 February 2014 and club free
reserves now exceeding USD 4 billion, it is not the
time to again burden members with more general
increases?
The number 13 is considered an unlucky number
and whether that ultimately becomes a lesser
number or more probably a greater number within
the IG Clubs remains to be seen.
It seems that the European Commission will
just not go away with the announcement of yet
another review, this time of the Club’s pooling
arrangements (IBER review)
Since our report last year, there has been further
growth in the Fixed P&I market with the notable
addition of Turk P&I Sigorta in 2014.
With so many fixed premium providers it will
inevitably put pressure on premium levels, much
to the benefit of the ship owner.
So to put it very simply, the Mutual market are
likely to be seeking increases in premium/calls,
modest we hope , whereas the Fixed market will
struggle to maintain existing levels of premium and
might have to consider reductions, depending on
record of the ship owner.
IG Group Pool reinsurers are expected to be hit
by the increase in cost of wreck removal of Costa
Concordia and Rena so we must be prepared for an
increase in RI cost, particularly with the final claim
estimate for these two losses appearing to increase
on a daily basis.
It will be interesting to see at the forthcoming
renewal season, how much migration of tonnage
there will be from Mutual to Fixed premium basis,
however, we must remember that this is not an
option for the majority of ship owners.
We hope this Report will assist you in
understanding the P&I Insurance market and
evaluating the results of each club and insurer.
Foreword
3
WHERE SHOULDHE MIGRATE TO?FIXED MUTUAL
4
5
TABLE OF CONTENTS
I. INTRODUCTION 6
Recent developments 6
Maritime Labour Convention 8
Wreck Removal Convention 9
Pool and Re-Insurance 11
Underwriting 12
Claims 14
Movement of Accounts during the 2014 Renewal 16
What Do We See on the Horizon? 18
II. INTERNATIONAL GROUP CLUBS 19
American Club 20
Britannia 22
Gard 24
Japan Club 26
London Club 28
North of England 30
Shipowners’ Club 32
Skuld 34
Standard Club 36
Steamship Mutual 38
Swedish Club 40
UK Club 42
West of England 44
III. OTHER P&I FACILITIES INCLUDING FIXED PREMIUM MARKET 47
British Marine 48
Carina 49
Eagle Ocean Marine 50
Hanseatic P&I 51
Ingosstrakh 52
Lodestar Marine 53
Navigators 54
Osprey 55
RaetsMarine 56
Rosgosstrakh 57
Turk P&I 58
6
INTRODUCTIONINTRODUCTION
TABLE NO. 1 / Investment Results
2014
145676252413212710693620
USD million
1 2 3 4 5 6 7 8 9 10 11 12 13
Sanctions Ukraine & Russia
Recent developments regarding sanctions worldwide are
now focused on the sanctions at the Black Sea Region,
Ukraine and Russia. These sanctions are especially
important for owners and operators trading to these countries.
With regard to financial sanctions in respect of Ukraine, the
designated individuals and entities should be regularly checked.
See our website for a relevant list.
Should an individual or entity be listed, any transaction with
them will be subject to financial sanctions.
With reference to Ukraine, financial restrictions are imposed for
the import into the European Union of goods originating in Crimea
or Sevastopol. In this regard, relevant Circulars that are from time
to time circulated at web sites of P and I Clubs should be regularly
checked for the details of these financial sanctions regarding the
goods originating in Crimea and/or Sevastopol. The circulars may
be found on the P&I clubs web sites. See our web site for examples.
However, there are some exceptions in respect of above
mentioned sanctions imposed for the goods originating in Crimea
and/or Sevastopol: In case a contract has been concluded before
25 June 2014, said contract and its ancillary contracts are allowed
to be executed until 26 September 2014. This time scale can be
extended.
If an individual and/or an entity provides a minimum of 10 days
advance notice to their EU Member State Competent Authority in
respect of the trade of goods which are “preferential origin” status
in accordance with Regulation (EU) No 978/2012 and Regulation
(EU) No 374/2014 or the EU-Ukraine Association Agreement, the
trade of these goods might not be subject to the financial sanctions.
Ukraine also stated that any vessel, regardless of the trading
activity, calling at Crimea and Sevastopol ports are being
determined and listed and those vessels may be arrested or even
confiscated if they then call to a Ukrainian port. Although there is
no such application of the Ukrainian government yet, this issue
should be taken into consideration when fixing vessels for these
ports.
With regard to the details of Russia Sanctions, Council Regulation
(EU) No 833/2014 (“the Russian Sanctions Regulation”) which
targets directly Russia’s state finances, energy and arms sectors
should be checked.
With reference to the financial sanctions in respect of Russia,
the designated individuals and/or entities and transactions which
involve the manufacturing or distributions of arms and related
materials should be regularly checked. See our web site for a
reference the relevant lists.
Should an individual and/or entity or a transaction is listed they
are subject to financial sanctions.
The prohibitions are summarized as follows:
-sale etc. of dual-use goods or technology, to any natural or legal
person, entity or body in Russia or for use in Russia, if those items
are or may be intended, in their entirety or in part, for military use
or for a military end-user;
-the provision of technical assistance or brokering services related
to dual-use goods and technology, to any natural or legal person,
entity or body in Russia or for use in Russia, if the items are or may
be intended, in their entirety or in part, for military use or for a
military end-user;
-the provision of financing or financial assistance related to dual-
use goods and technology, to any natural or legal person, entity or
body or designated banks in Russia or for use in Russia, if the items
are or may be intended, in their entirety or in part, for military use
or for a military end-user.
The abovementioned transactions are exports of certain energy-
related equipment and technology to Russia including:
-line pipe, drill pipe, casing and tubing used in oil or gas drilling,
rock-drilling or earth-boring tools, certain types of pumps, liquid
elevators, mobile drilling derricks, floating or submersible drilling
or production platforms, and other oil and gas drilling related
equipment. A list of CN codes has been published to help exporters
identify restricted items.
Export licenses will be denied if the equipment is provided
under a contractual obligation which was entered into on or after
1 August 2014 and there are reasonable grounds to consider that
the products are destined for projects pertaining to deep water oil
exploration and production, Arctic oil exploration or production, or
shale oil projects in Russia.
Russian and Ukrainian sanctions may be limited or lifted in full
in the near future but recent situation may affect the trading
activities to such areas.
RECENT DEVELOPMENTS
*In this and other graphs 2014 means policy year 2013/2014
2014
7
INTRODUCTIONINTRODUCTION
TABLE NO. 2 / Total Assets
32916182722562493136177985699015335471321811
USD million
TABLE NO. 3 / Free Reserves
2012 2013 2014
60 54 57461 438 472826 895 944167 158 156145 154 161314 312 312234 276 299291 308 335353 362 369296 286 301142 151 168486 494 528179 197 216
USD million
1 2 3 4 5 6 7 8 9 10 11 12 13
1 2 3 4 5 6 7 8 9 10 11 12 13
No 2014
8
INTRODUCTIONINTRODUCTION
TABLE NO. 4 / Free Reserves over GT
Free Reserves USD mEntered Tonnage
(owned) GT mRatio USD
AMERICAN CLUB 57 18 3,24
BRITANNIA 472 108 4,37
GARD 944 187 5,06
JAPAN CLUB 156 92 1,70
LONDON CLUB 161 43 3,71
NORTH OF ENGLAND 312 131 2,38
SHIPOWNERS 299 24 12,67
SKULD 335 75 4,46
STANDARD CLUB 369 105 3,51
STEAMSHIP MUTUAL 301 69 4,38
SWEDISH CLUB 168 37 4,53
UK CLUB 528 124 4,26
WEST OF ENGLAND 216 57 3,78
The MLC that establishes an owner’s obligations towards
the crew has now been in force for a year and at the time
of writing 61 States constituting 80% of the world fleet
has ratified the Convention.
The main points of the Convention was to establish minimum
requirements for the seafarers to work on a ship, as well as
stipulating proper conditions of employment, accommodation and
recreation facility requirements and minimum standards for food,
health, care, welfare and social security.
The Convention contains requirements for compensation
for occupational injury, death and long term disability and
requirement for repatriation of the seafarers in case where they
became abandoned due to the ship-owners insolvency.
For these requirements the Convention required Certificate of
Financial Security, which the P&I Clubs provided, even though
the costs of repatriation due to the ship-owners insolvency, was not
covered by the Club rules.
In April 2014 a meeting was held by the Special Tripartite
Committee established according to the Convention, and at that
meeting it was decided to increase the obligations under the
Convention to also secure payment of wages and outstanding
entitlements for abandoned seafarers for a period up to 4 months.
These obligations are also to be backed by Certificates of
Financial Security. Again, the Clubs have been requested to
consider issuing such certificates, even though the payment
of wages and outstanding entitlements are not covered by the
club rules.
The Boards of the Clubs will now have to decide if they are willing
to extend their Certificates to cover these additional obligations
that currently fall outside Club cover.
The amendments to the Convention are expected to enter into
force in 2017, so there is ample time for the Club Boards to make
their decisions.
That vessels comply with the requirements of the Convention is
controlled by the Flag States, so as part of a Ports State Control,
the inspectors will also check that the minimum requirements of
the MLC are fulfilled.
In the year that has passed since the Convention came into
force, we have been advised that more than 20 vessels have
been detained due to MCL violations. In this respect it should
be remembered that initially the Convention was only in force
in 30 countries, where-as progressively it will cover 61 countries
with more to come. So there are now many more places where the
requirements under the Convention are controlled.
MARITIME LABOUR CONVENTION 2006
9
INTRODUCTIONINTRODUCTION
The Wreck Removal Convention (WRC), which was
agreed at an IMO Conference in Nairobi in 2007, will
enter into force 14 April 2015.
The Convention intends to provide a set of uniform
international rules for the prompt and effective removal of
wrecks located within the Exclusive Economic Zone or 200
NM outside the territorial waters of a state that is party to the
convention. A convention state can also declare to extend the
convention to its own territory.
The convention defines what is a ship and a wreck, as well as a
maritime casualty. It imposes an obligation to remove the wreck
if it poses a hazard to navigation or the marine environment,
or related interests, such as affecting the maritime coastal,
port and estuarine activities, including fisheries activities,
tourist attractions, health of the coastal population including
conservation of marine living recourses and wildlife as well as
offshore and underwater infrastructure.
There is an obligation on the Master and Operator of a vessel
to report to the affected State if a vessel has been involved in
a maritime casualty resulting in a wreck. It is defined what has
to be reported, as well as what the State shall use of criteria for
their evaluation of if the wreck exposes a hazard, and thus can
be ordered removed.
The Convention imposes a rather strict liability on the ship-
owner, only excluding liability if the wreck was caused by “
act of war, hostilities, civil war, or a natural phenomenon of an
exceptional, inevitable and irresistible character”, or was caused
with intent by a 3rd party or, was caused by negligence or
wrongful act of a Government responsible for the maintenance
of lights or other navigational aids. Here it should be noted
that Piracy, is not an exclusion.
The liability under the Convention can be limited according
to the 1976 Limitation Convention. However a number of
nations have excluded wreck removal from the 1976 Limitation
Convention, so the result is that in a number of States the liability
for wreck removal cannot be limited. As an example of this can
be mentioned the Costa Concordia in Italy and the Rena in New
Zealand, where the owners could not limit their liability and
the costs of these wreck removals have run into the hundreds of
millions of USD.
According to the Convention the participating states must
require vessels under their flag, with a tonnage above 300
GT to have compulsory insurance for wreck removal, and the
vessels must have a certificate of appropriate insurance or
other financial security to be issued by the state of the ships
register. The Wreck Removal Convention stipulates a Direct
Action against the insurers, but with the insurers having the
same defences as the ship-owners would have had if he had
been sued first.
In states, that have not excluded wreck removal from limitation
under the1976 Limitation Convention, it means that the state
will have a direct action against the insurer for an amount up to
the limitation amount. When the Limitation amount has been
exhausted no more claims can be brought against the ship-owner
or the insurer.
In states, that have excluded wreck removal from limitation
under the 1976 Limitation Convention, it means that the state
will have a direct action against the insurer for an amount up to
the limitation amount. When the limitation has been exhausted
the state can continue the claim against the ship-owner, who in
turn will then approach his insurer for re-imbursement for claims
up to any applicable limitation amounts under the insurance.
Even though there is a Direct Action provision in the
Convention, we understand that the Clubs will issue the
required certificates, as wreck removal is fully covered under
Clubs rules and as the amount for which there is direct action
- under the insurance certificate - is limited to the limitation
amount under the 1976 Limitation Convention.
WRECK REMOVAL CONVENTION
TABLE NO. 5 / Release Calls
20 20 207,5 10 17,55 15 205 45 4515 15 155 20 200 0 00 0 153 4 85 10 257,5 12,5 2012,5 20 155 15 30
1 2 3 4 5 6 7 8 9 10 11 12 13
Updates will be available on www.omniltd.com.*For West of England, the Release percentage is of the net Advance Call premium, i.e. Advanca Call premium excluding the Group reinsurance cost.
%
10
INTRODUCTIONINTRODUCTION
TABLE NO. 6 / IG Market Reinsurance Structure for 2014/2015 Policy Year
Updates will be available on www.omniltd.com.
5% ICR
10% ICR
FIRST LAYER65% SHARE
HYDRA30% SHARE
UPPER- UPPER POOL - REINSURED BY HYDRA
UPPER POOL - REINSURED BY HYDRA
LOWER POOL- REINSURED BY HYDRA
LOWER POOL
INDIVIDUAL CLUB RETENTION (ICR)
Chartered Entries
P&I & OIL POLLUTION
Multi- Year Fixed Placement. 5% share
80m -
350m - - 350m
- 100m
60m -
45m -
30m -
9m -
INTERNATIONAL GROUP OF P&I ASSOCIATIONS GENERAL EXCESS OF LOSS REINSURANCE CONTRACT STRUCTURE
OWNED AND CHARTERED ENTRIES(INCLUDING OVERSPILL PROTECTION, HYDRA PARTICIPATION, POOLING AND
INDIVIDUAL CLUB RETENTIONS) 12 MONTHS AT NOON GMT 20TH FEBRUARY, 2014
5% ICR
10% ICR
COLLECTIVE OVERSPILLEXCESS OF UNDERLYING
THIRD LAYEREXCESS OF UNDERLYING
SECOND LAYER95% SHARE
SECOND LAYER95% SHARE
FIRST LAYER65% SHARE
FIRST LAYER65% SHARE
HYDRA30% SHARE
HYDRA30% SHARE
UPPER- UPPER POOL - REINSURED BY HYDRA
UPPER POOL - REINSURED BY HYDRA
LOWER POOL- REINSURED BY HYDRA
LOWER POOL
INDIVIDUAL CLUB RETENTION (ICR)
P&I
Single per - vessel retention
Owned Entries
OIL POLLUTION
3.08bn-
2.08bn-
1.08bn-
580m -
80m -
- 1.08bn
- 3.100m
- 100m
- 2.100m
60m -
45m -
30m -
9m -
11
Burdened by the Costa Concordia and the Rena wreck removal
cases in 2011, where the total reserves have now been reported
to be estimated at USD 1.500 Million and USD 450 million
respectively, changes were again made to the IG Clubs Pool arrangement
to lessen the blow of the increases of the reinsurance premiums.
The Pool level for the individual Clubs was retained at USD 9 million,
but the Pool Layer shared by the Club was increased from USD 70
million to USD 80 million.
The Clubs also increased their proportion of the cover by taking a 5%
co-insurance of the layer from USD 80 Million to USD 100 million in
addition to the Pool’s 30% co-insurance of the layer from USD 80 Million
to USD 580 million.
In order to minimize the premium increases the Clubs purchased
a multi-year fixed premium cover for 5% of the layer from USD 100
Million to USD 1.100 million.
The combined effect of these changes to the Pool and the Reinsurances
has lessened the increase of the Reinsurance Premium for Cargo vessels
to approximately 5% and 20% for passenger vessels
The total premium for the Clubs reinsurance program is now more than
USD 650 Million compared to USD 410 million in 2011.
Also it must be borne in mind that as the Pool level has increased from
USD 70 million to USD 80 million. – as well as the additional 5% of
the layer from 80 million to 100 million, a higher proportion of larger
claims will be borne directly by the Clubs, and thus gives room for more
fluctuation in the Clubs own claim results. We are aware, though, that
most Clubs have some kind of reinsurance programs to ease any such
fluctuations.
Finally, the US oil pollution voyage surcharge has been removed
reflecting the continued improvement in the record of the dirty
tanker sector.
POOL AND RE-INSURANCE
INTRODUCTIONINTRODUCTION
TONNAGE CATEGORY USD per GT % CHANGE from 2014
TANKERS CARRYING PERSISTENT OIL AS CARGO 0,7963 5
TANKERS CARRYING NON-PERSISTENT OIL AS CARGO 0,3415 5
DRY CARGO VESSELS 0,5203 5
PASSENGER VESSELS 3,7791 20
TABLE NO. 7 / IG Market reinsurance rates for 2014 policy year
Updates will be available on www.omniltd.com.
12
INTRODUCTIONINTRODUCTION
Although it works in the background, the insurance coverage
provided by P&I Clubs perform a critical role in meeting the
limits of liabilities and providing broad range of covers that
are needed to transport basic needs of consumers, as the vast majority
of goods are shipped by means of vessels.
It lies in today’s underwriting philosophy that generating profit for
Clubs is no longer just producing minimum technical results to be
compensated by income from passive financial investments. The way
to go in recent years is called diversification. This includes buying
managing agencies, forming syndicates at Lloyd’s and introducing
new range of insurance products. This move is also welcomed by the
rating Agencies.
During 2013-2014 policy year, shipping trade has not been easy
for many shipowners. In addition to the high operating expenses
shipowners were asked to contribute to general premium increases
varying between 2.5% to 12% giving an average ratio of 6.89%. Some
of the Clubs also made adjustments in their level of deductibles and
also increases on their FD&D terms. Most of the P&I Clubs were
able to secure the level of GI they requested and some of them with
additional increases due to unfavourable loss records.
Looking at the reinsurance tariff rates during 2014, the percentage
of change has been between 5.26% -5.28% for tankers and dry cargo
vessels. There has been a 20% surcharge on passenger vessels that can
be attributable to the deterioration of the “Costa Concordia” claim.
There are some positive developments on claims trends compared
to previous year as there is a reduction in the number of claims
reported to the Group Pool (layer of USD 9 million-70 million). The
number of claims for the 2013 year has come down to 17 totalling less
than USD 300 million which is an improvement on the previous years
with 25 claims in 2012.
These developments resulted in the increase in clubs’ free reserves
for the 2013 collectively going up by USD 244 million. Compared
with the previous year this is almost a double increase. All of the
clubs have reported profitability with Gard announcing the highest at
USD 49 million surplus maintaining their position as the wealthiest
of the Clubs with USD 944 million free reserves.
The IGA continued to keep a close eye on the regulatory
developments such as the Athens Convention 2002 protocol which
brought higher limits in passenger liability. By virtue of this Protocol,
passengers will have the right to submit a direct claim against the
financial security provider or insurer if the incident happened during
the course of carriage based on strict liability of the carrier.
In addition to this, on 20 August 2013, Maritime Labour Convention
(MLC) 2006 entered into force bringing in additional liabilities for
P&I clubs. What will become an additional burden on Clubs is the
new requirement in 2016 under MLC being the back wages owed
to crew following a shipowner’s insolvency. In order to respond to
the requirements under MLC 2006, the Clubs incorporated some
provisions in their rules for the 2013/2014 period that may need
further amendments depending on future developments. You will
find a separate article in the Introduction section of this report with
more detailed information about the MLC convention.
A noticeable development for the Turkish market, in 2014 renewals,
has been Skuld’s decision to reduce their Turkish membership.
Reasons were singleton/doubleton entries not producing enough
premium or those with unfavourable loss records were asked to
pay significant rises which ended up half the members of this Club
renewing with other group Clubs.
Another important development has been the establishment of the
Turkish P&I just before the Feb 2014 renewals. TPI is presently
concentrating on relatively smaller tonnage trading in local Turkish
waters operating on a basis of fixed premium.
In 2013 London Club has started showing interest also for smaller
vessels. This club was traditionally interested in insuring larger
tonnage and mainly bulk carriers. It is to the benefit of the shipping
market and especially to smaller tonnage operators that there is now
an additional capacity. The club is known for their practical and
friendly approach towards the claims of its members.
It was also reported that Standard Europe P&I Club’s London class
will now start to offer fixed premium P&I with USD 500 million limit
for its members. This Class of the club serves the small size ship
owners and it will be an option for its mutual members to consider.
In our last year’s report we mentioned about fixed facility of Skuld
for small size ships. This year we have also seen West of England
offering for such tonnage a fixed premium facility for P&I insurance
with the same Club rules, including the Omnibus rule.
It was also interesting to see enthusiastic efforts of Standard Club
in seeking support among other clubs to provide direct guarantee
against US OPA 90 pollution risks. It aimed at reducing the cost
for the members who have to buy additional cover via other insurers.
We will continue to note the underwriting changes in 2014 and hope
to explore these in our next report.
UNDERWRITING
13
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15
American Club 10 15 29 4 2 5 10 10
Britannia 5 23,8 12,5 5 5 5 12,5 2,5
Gard 5 10 15 0 0 5 5 5
Japan Club 10 20 27,5 12,5 10 3 5 7,5
London Club 7,5 17,5 15 5 5 5 12,5 10
North of England 7,5 17,5 17,5 5 3 5 15 7,5
Shipowners 5 20 10 5 0 0 5 5
Skuld 2,5 7,5 15 5 - - - -
Standard Club 5 15 15 3 3,5 5 7,5 12,5
Steamship Mutual 9 15 17,5 5 0 5 7,5 10
Swedish Club 7,5 15 15 2,5 2,5 5 7,5 7,5
UK Club 7,5 17,5 12,5 5 5 3 7,5 10
West of England* 5 15 19 5 5 5 7,5 7,5
INTRODUCTIONINTRODUCTION
TABLE NO. 8 / General Increases
TABLE NO. 9 / Underwriting Performance
-11-22-44-10-192024-498-6-1
USD million
%
Updates will be available on www.omniltd.com.
1 2 3 4 5 6 7 8 9 10 11 12 13
* For West of England the percentage is of the net ETC premium i.e. ETC premium excluding the Group reinsurance cost.
2014ClubsNo
14
INTRODUCTIONINTRODUCTION
The P&I business, particularly the claim handlings are
definitely becoming more and more important, as shipping
is continuing to face increased liabilities, international
maritime and national legislation and regulations.
Clubs have reported high levels of claims activity within the USD 9
million retention, although it seems less than last year. Cargo claims,
continued to be the largest category of claims at the low level i.e. up
to USD 1 million. Other categories of claims have experienced higher
claim amounts, in particular collision and removal of wreck. The high
value claims, in excess of USD 1 million, whilst representing less than
1% of the total number of claims, have consistently accounted for
approximately half of the total value of the claims.
Human error is the first and major factor for the claims. COSTA
CONCORDIA is a good example how the human error could
cause catastrophic results and claims. The majority of this claim
is loss of life and wreck removal. The removal and demolition of
COSTA CONCORDIA is now expected to cost in excess of USD
1.5 billion and the RENA, which also occurred in 2011, more than
USD 450 million.
Today most cargoes except bulk cargoes are containerized.
Undeclared or misdeclared cargoes is a major problem and lead
huge risk to life and property. P&I Clubs have been involved in a
number of multi-million dollar incidents caused by misdeclared
cargo, specifically involving calcium hypochlorite on container
ships. No doubt that there is need for further work to be done
in this area.
Although there is slow global economic recovery in progress,
there has been an increase in the number of failures to pay hire and
demurrage, ship performance disputes due to high bunker prices,
delays and sanction enquiries. Thus, the demand for the FD&D
services remains high.
Turning to the pool claims of the year 2013/2014, 17 pool claims
with a total value of 302 million, were notified to the International
Group. However, the indication is that 2013/2014 will be a better year
for pool claims than recent years, in particular the 2011/2012 policy
year, which included both Rena and Costa Concordia cases.
Having reviewed the nature of the pool claims, 7 out of the 17 claims
involved collision, which for some resulted in grounding, fire on board
and pollution. One ship was breaking into two following grounding
and one ship sank following structural failure that led to the vessel
breaking into two. In that respect, perhaps the P&I Clubs would
prefer to cover RDC as it traditionally was the case i.e. one fourth
only, but due to pressure from brokers and practical reasons, clubs are
now regularly covering four fourths.
The Ebola outbreak in West Africa has resulted in a number legal
and commercial considerations. “Safe Port” is one of them. Do the
owners have to follow charterers order and proceed to a port where
there is an outbreak of Ebola and what if the outbreak is only nearby
the port? If the vessel has called a port where there is an outbreak of
Ebola and subsequently is delayed in a subsequent port of call, will
the vessel then be off hire, and what will be the situation if stowaways
from an affected area is found on board? We shall not try to answer the
questions in this short article but refer you to articles from the leading
maritime law firms and the P&I clubs. It should also be mentioned
that this is not a new situation. An example is SARS (Severe Acute
Respiratory Syndrome) which broke out in Hong Kong in 2002-2003.
CLAIMS
TABLE NO. 10 / Pool Shares 2014/2015
Before L/R After L/R2,6 3,19,0 7,816,1 16,68,3 9,44,1 3,710,6 12,13,8 3,86,6 4,88,9 8,77,7 7,94,9 7,811,0 8,56,4 5,9
%
1 2 3 4 5 6 7 8 9 10 11 12 13
15
INTRODUCTIONINTRODUCTION
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15
American Club 0/20 0/35 0/30 0/25 20/20 25/25 25/25 0/0 0/0 0/0
Britannia 40/30 30/30 30/30 40/40 40/32,5 40/40 40/40 40/40 45/45 45/45
Gard 25/20 25/20 25/25 25/25 25/10 25/15 25/20 25/15 25/15 25/25
Japan Club 30/30 30/60 30/30 30/30 40/40 40/50 40/40 40/40 40/40 40/40
London Club 40/40 40/89 40/89 40/75 40/40 40/40 0/0 0/0 0/0 0/0
North of England 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 30/30 20/20
Shipowners 25/0 25/0 10/0 10/0 10/0 0/0 0/0 0/0 0/0 0/0
Skuld 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0
Standard Club 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0
Steamship Mutual 0/0 0/12,5 0/14 0/20 0/0 0/0 0/0 0/0 0/0 0/0
Swedish Club 0/0 0/35 0/35 0/0 0/0 0/0 0/0 0/0 0/0 0/0
UK Club 0/0 0/20 0/25 0/25 0/0 0/0 0/0 0/0 0/0 0/0
West of England* 20/35 20/55 20/55 20/65 20/20 30/30 30/30 30/30 35/35 35/35
TABLE NO. 11 / Supplementary Calls
%
TABLE NO. 12 / Average Expense Ratio
19,38,011,35,78,412,518,012,310,911,312,19,414,2
%
5 years at 20.02.20141 2 3 4 5 6 7 8 9 10 11 12 13
Updates will be available on www.omniltd.com.* For West of England the percentage is of the net ETC premium i.e. ETC premium excluding the Group reinsurance cost.
16
INTRODUCTIONINTRODUCTION
The shipping market conditions have now been difficult
for 5-6 years with average earnings for almost all types
of vessels, significantly below the 10 years average. The
2014 renewals took place under these tough market conditions
and furthermore were negatively affected by Sanctions and War
Risk Area Restrictions.
Although there are no solid signs for improvements in shipping
earnings in the near future, the world fleet grew by an estimate
3.8% in terms of GT, close to GT 1.14 billion and by 1.7% in
vessels numbers in 2013. It is expected that both number of
vessels and tonnage will grow for the next 10 years.
Gard, North of England, UK, Skuld and Steamship are some
of the clubs with more tonnage on the books after completion
of 2014th renewals, although it is not the spectacular gains of
previous years. Gard declared a rise of 7.1%, North of England
and UK Club by 4%, Steamship Mutual by 4.85%.
General Increases requested by Clubs followed similar pattern
to the previous year where the lowest was 2.5% of Britannia and
the highest was 12.5% of Standard Club.
IT IS NOT LIMITED TO BELOW LIST BUT WE HAVE SEEN THE FOLLOWING CHANGES;American Club won Saga Cruises from Steamship Mutual. They
lost Saltchuk Resources to Steamship Mutual.
Gard won partial fleet of Yasa, Glory Navigation from Britannia.
They lost Klaveness, Fjordl, Eidsvaag, Halten and Stornes to
Skuld and Hydor.
London Club won partial fleet of Zodiac Maritime and Eastern
Pacific from Standard Club. They lost Entrust to Skuld
North of England won partial fleet of Zodiac Maritime, Eastern
Pacific, Thenamaris, J Lauritzen, Saga Shipping, Alstership,
Erwin Strahlmann and NCC from Standard Club, Swedish Club,
British Marine and IF insurance group. They lost Ultrabulk,
Cosco Dalian, PT Arpeni, Reederei Hinsch to Steamship Mutual,
Skuld and Hydor
Shipowners won partial fleet of Ocean Tanker from North of
England. They lost IDO, Dentur and Uzmar to Turkish P&I
Skuld won Saltchuk, Torm, Cosco Dalian, PT Arpeni, Entrust,
Meratus Line, Klaveness, Fjord from UK Club, American Club,
Britannia, Nepia, London, BML, and Gard. They lost Geden,
Mardeniz, Med Marine, Intertrade to West of England, Standard
Club, Turkish P&I and Hydor.
Standard Club won Mardeniz. They lost Zodiac Maritime,
Eastern Pacific, Ocena Tanker, Thenamaris, Samsung Logix,
Daewoo and Keumyang to North of England, North of England,
London Club, Shipowners Club, Steamship Mutual and Korean
P&I
Steamship Mutual won Ultrabulk, Samsun Logix and Daewoo
from North of England and Standard Club. They lost Saga
Cruises to American Club
Swedish Club won partial fleet of Yasa. They lost J Lauritzen to
North of England.
UK Club won partial fleet of BW from Britannia. They lost Yasa
to Gard and Swedish Club.
West of England won partial fleet of Geden from Skuld.
Turk P&I won IDO, Uzmar, Dentur from Shipowners and Med
Marine from Skuld.
Korean P&I won Keumyang from Standard Club
MOVEMENT OF ACCOUNTS DURING THE 2014 RENEWAL
17
INTRODUCTIONINTRODUCTION
TABLE NO. 14 / Owned and Chartered Tonnage Split
GT million
TABLE NO. 13 / Entered Tonnage
2012 2013 2014
17 16 18140 136 131220 232 244104 105 10348 47 48163 170 18020 22 2465 72 75124 135 13193 102 11450 52 56192 200 20466 71 79
GT million
1 2 3 4 5 6 7 8 9 10 11 12 13
Owned Chartered17 1108 23187 5892 1143 5131 4924 N/A75 N/A105 2669 4537 19124 8057 22
1 2 3 4 5 6 7 8 9 10 11 12 13
* Skuld is only Owned tonnage
*Skuld report the fi xed business net premium in % of the total net premium, which is 28%
18
INTRODUCTIONINTRODUCTION
For many years now the IG Club’s have insisted that P&I rates have to be increased and this has resulted in most clubs applying General Increases of varying percentages. Every year the reason is different. One year it was pool claims, another year crash of the stock market, increase of overall claims, Solvency II requirements, S&P requirements, etc. The graph showing the free reserves however do not change and in fact most of the Clubs show an increase in their free reserves.
This year the claims experience of certain Clubs will show favourable results, however we think that these clubs will still charge general increases.
We see that there are new Clubs and fixed premium facilities emerging. Turkish P&I is one of the new comers established to provide P&I cover mainly for domestic waters. China P&I and Korean P&I are two clubs which are providing cover on mutual basis and they are two candidates to IGA membership.
We think the Clubs who diversify their product line to meet industry expectations will be the main players on the horizon. Amongst the P&I Clubs, it has recently been a new fashion to provide cover within different areas, mainly for H&M. The Swedish Club were the pioneers and along with Gard are the market leaders for the one stop shop. Skuld have now followed them but taken a different route by way of establishing a Lloyd’s Syndicate. We are sure that we will very soon see other clubs follow suit.
Current diversification options are forcing us to think there might be reversion in terms of products where H&M and P&I risks will be combined in same policy sometime in the near future.
WHAT DO WE SEE ON THE HORIZON?
19
II. INTERNATIONAL
GROUP CLUBS
20
OTHER
ASIA
NORTH AMERICA
EUROPE
www.american-club.com
Tonnage by Vessel Type Tonnage by Area
BULK CARRIERS
TANKERS
TUG/BARGES/SMALL CRAFT
GENERAL CARGO, CONTAINER VESSELS&
RO-ROS
Higher deductibles and other modifications of the
insurance conditions came to 2%. Irrespective of this
increase of close to 8% , the net premium declined by USD
4.1 million to USD 89.4 million. This is a 4.4% decline in
the net premium. One should then think that the tonnage
entered declined, but that is not the case. The tonnage
increased with approximately 4 %, so the reduction in net
premium is probably a result of the “churn” effect during the
policy year.
The total expenditure came to USD 100.3 million and the
underwriting result was therefore negative with USD 10.9
million. The Clubs equities returned 27.9% but because of
the more cautious investment policy decided back in 2011,
most of the investments are fixed income investment and
therefore the overall portfolio returned 6.7% which is not
bad. In terms of money, it came to USD 14.1 million, and the
free reserves were lifted with USD 3.2 million and now stand
at USD 57.3 million. This is an acceptable figure in terms of
free reserves over GT, but the size of the club makes it more
volatile and that is probably one of the reasons for the S&P
rating being BBB-.
As the individual retention of the Group clubs grow, many
clubs need reinsurance arrangements to secure stability, in
particular the smaller clubs, and American club report that
it has arranged excess of loss cover for USD 4 million in
excess of USD 5 million placed at Lloyd’s of London and
with Partner Re and a reinsurance for its exposure to the
lower Pool with Hannover Re. For 2014 the arrangement
with Hannover Re has been expanded through the purchase
of a whole account aggregate reinsurance of claims within
the Club’s retention.
The Clubs participation in Eagle Ocean Marine (EOM), a
fixed premium program for insurance of P&I and FD&D risks
for smaller vessels in local and regional trades, principally in
the East Asia, Europe, Africa and other areas outside United
States, has been increased from 15% to 20%. An excess of loss
reinsurance of USD 25 million in excess of USD 25 million
has been purchased from the Lloyds market making available
primary cover up to USD 50 million. Further developments
of Eagle Ocean have taken place in 2014 making cover
available for up to USD 100 million and for vessels larger than
the original GT 12,500 cap.
At the 20.2.13 renewal, a premium increase of 10% was announced and the actual cash
increase ended up being 6%, exclusive of additional reinsurance costs.
AMERICAN CLUB
21
Free Reserves
2007 32
2008 34
2009 36
2010 48
2011 64
2012 60
2013 54
2014 57
S&P Rating
2011 BB
2012 BB+
2013 BBB-
2014 BBB-
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 22011 2012 2013 20144
Original % 0 0 0 0 20 25 25 0 0 0
Final/Current 20 35 30 25 20 25 25 0 0 0
USD million
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
115 112 112 108
105 96 94 89
104 106 115 100
1 -10 -22 -11
14 7 16 14
64 60 54 57
2010/2011 2011/2012 2012/2013 2013/2014
American Club Consolidated Financial Year Summary USD million
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
15 16 15 17
1 1 1 1
16 17 16 18
220111 20122 20133 2014
Entered TonnageAMERICAN CLUB
22
OTHER
AMERICAS
ASIA
SCANDINAVIA
EUROPE
OTHER
CONTAINER VESSELS
GENERAL CARGO
BULK CARRIERS
TANKERS (OTHER)
TANKERS
BRITANNIA
www.britanniapandi.com
Tonnage by Vessel Type Tonnage by Area
O wned tonnage is still sizable and stands at GT 108.0
million and the chartered tonnage at GT 23.0
million , producing total entered GT 131.0 million .
The Club is reporting that incurred claims in the 2013/14
policy year were just under USD 205 million, the highest
ever level at the 12-month stage. The number of claim
notifications has gone down from 6,889 the previous
year to 5,821 in 2013/14 a fall on over 15%. However, 40
claim notifications are expected to cost the Club USD
1 million or more each – high value claims - and these
40 notifications accounts for more than 55% of the total
cost of claims for the year. Only two of the high valued
claims are expected to exceed pool level USD 9 million.
Charterers claims are not included in the high value claims
because of the Clubs reinsurance arrangements in respect
of chartered entries.
Although the Club’s net premium has gone down by USD 9.5
million, it must be taken into consideration, that a premium
discount for P&I was offered on renewing 2013/14 tonnage,
amounting to USD 10.3 million across the membership, as
well as a waiver of half of the 50% deferred call for FD&D
in the 2012/13 policy year, amounting to USD 1.4 million.
The underwriting result is still negative, minus USD 21.9
million, but much better than last year’s minus USD 70
million. With a net investment result of USD 55.8 million
a surplus of USD 33.9 million is raising the free reserve to
USD 471.9 million. After all, a reasonable result.
The Club’s first interactive assessment by Standard and
Poor’s (S&P) have just been announced. S&P finds that
the Club’s competitive position and business risk profile is
strong, while the financial risk profile is very strong and an
“A” rating was given.
The tonnage of the Club increased during the year with just under GT 2 million but at the
renewal 20.02.2014 approximately GT 4.5 million was not renewed, leaving the Club with
GT 2.5 million less owned tonnage and GT 2.0 million less chartered tonnage.
5%6%
%31%
23
BRITANNIA
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
103 111 111 108
33 29 25 23
136 140 136 131
220111 20122 20133 2014
Entered Tonnage
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
299 282 294 284
246 236 245 236
242 278 315 258
4 -42 -70 -22
75 49 47 56
454 460 438 472
2010/2011 2011/2012 2012/2013 2013/2014
Free Reserves
2007 301
2008 311
2009 277
2010 376
2011 454
2012 461
2013 438
2014 472
S&P Rating
2011 Api
2012 Api
2013 Api
2014 A
Britannia Consolidated Financial Year Summary*
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 22011 2012 2013 20144
Original % 40 30 30 40 40 40 40 40 45 45
Final/Current 30 30 30 40 32,5 40 40 40 45 45
USD million
USD million
*Boudicca’s results is fully consolidated into the fi gures above
24
ASIA
NORWAY
AMERICAS
REST OF EUROPE
GREECE
GERMANY
PASSENGER & CRUISE VESSELS
BULK CARRIERS
OFFSHORE VESSELS
TANKERS
GAS CARRIERS
MOU
CAR CARRIERS
OTHER DRY
CARGO
CONTAINER VESSELS
Tonnage by Vessel Type Tonnage by Area
Gross Premium for the Group increased 8.4% to USD 959
million and the Group as whole achieved a Combined
Ratio of 97%. For P& I the Combined Ratio was 102%,
which is in line with the Clubs strategy to be within 105%,
however aiming at a Combined Ratio that is slightly below
costs. The underwriting deficit on the P&I was more than
covered by a positive underwriting result from the Marine
and Energy side.
The Club’s investments yielded a gain of 4.3% giving a return
on investments of USD 76 million.
The gross P&I premium was USD 621 million. For the 5th
year in a row the Club reduced the ETC premium for it
mutual members, by reducing the Deferred Call from 25%
to 15%. The amount ceded to members was USD 35 million.
Tonnage in the Club increased to GT 187 million, a 7%
increase that is well above the world tonnage increase and
above the average increase of the IG fleets, which cements
the Clubs position as the largest of the P&I Clubs. Last
year we reported that the Club had 7 Pool claims in the
2012 insurance year. In 2013 insurance year the Club did
not see any claims in excess of USD 10 million. These
numbers just shows the volatility and the random at which,
such big claims happen.
The Club opened an office in Rio de Janeiro, subsequent
to receiving license to write reinsurance business in Brazil.
An office was also opened in Singapore, which provides
underwriting and claims handling for the wider geographical
area of South East Asia and Oceania.
In the Clubs continued efforts to enhance the product range
for its members and clients, the Group introduced two new
insurances. A property insurance to cover damage or loss of
containers as well as a Ship Managers Liability policy to cover
the liabilities arising from negligence in the performance of
their contractual obligations.
2013 was a year of change for Gard, as Rolf Thore Roppestad,
a long-time employee of Gard , was appointed as new CEO,
replacing Claes Isacson, who sadly passed away earlier in the
year. New Chairman of the Board became Bengt Hermelin,
Semco Shipholding, Singapore, who took over from Stephen
Pan, World Wide Shipping, Hong Kong, who has been on the
Clubs board for almost 2 decades. Although there are changes
at the top it is with people who have both served the Club for
a long time, so we expect no major changes, but continued
steady progress.
Even though the Gard Group obtained very good results
for 2013, it still cautions that the marine insurance market
for all lines of its business is very competitive, so it calls for
prudent risk selection and correct pricing of all its insurance
portfolios.
Once again there is very positive reporting from the Gard Group. The Club was able to lift its
Free Reserves to USD 944 million, an increase of USD 50 million from the previous year.
www.gard.no
GARD
5%5%
4%3%
14%
9%2%
25
GARD
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
145 163 174 187
51 58 58 58
196 221 232 244
220111 20122 20133 2014
Entered Tonnage
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME*
TOTAL FREE RESERVES*
463 505 530 586
377 414 405 444
403 444 498 488
-26 -29 -93 -44
140 49 114 76
790 826 895 944
2010/2011 2011/2012 2012/2013 2013/2014
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 22011 2012 2013 20144
Original % 25 25 25 25 25 25 25 25 25 25
Final/Current 20 20 25 25 10 15 20 15 15 25
USD million
*Investment Income and Free Reserves are given at Group level
*The Owned Tonnage fi gure includes MOUs
Free Reserves
2007 512
2008 581
2009 430
2010 638
2011 790
2012 826
2013 895
2014 944
S&P Rating
2011 A
2012 A
2013 A+
2014 A+
USD million
GardConsolidatedFinancial YearSummary
26
PHILLIPINE
OTHER
BAHAMAS
PANAMA
SINGAPORE
HONG KONG
LIBERIA
MARSHALL ISLAND
JAPAN
OTHERGENERAL CARGO
BULK CARRIERS
CAR CARRIERS
LPG AND LNG
CONTAINER VESSELS
TANKERS
The fleet was stable at GT 91.8 million owners tonnage
(2012/13 GT 91.6 million ), but the charterers
portfolio decreased to GT 11.4 million., so now the total fleet
stands at GT 103.2 Million.
Gross Premium increased to USD 258.9 million from USD
223.5 the previous year. The Club struggled with the JPY
that weakened towards the USD from JPY 79 to JPY 90.
Therefore the so-called “Abenomics”, the financial stimulus
program in Japan, did not give much help to the Club that
saw the investments give a surplus of USD 24.8 million
compared to a gain of USD 34.2 million the year before. The
decreasing JPY diluted the premium for own account, but it
achieved a technical result of minus USD 9.8 million, which
was somewhat better compared to the year before, where it
had an underwriting loss of USD 26.3 million.
Overall the Club’s financial year produced a surplus of USD
15.0 million, when accounting in JPY. But when the figures
are converted into USD the result of the year actually slightly
decreased the Free Reserves from USD 157.5 million to
USD 156.0 million.
The Club experienced a slight decrease in the number of
claims, however the Club experienced 2 pool claims. 50% of
the claims are cargo claims, 30 % crew claims and the Club
saw a reduction of the collision cases. The Club has been
very active in its Loss Prevention efforts by having seminars,
workshops and arranging visits to their members and their
vessels, and the Club intends to maintain these activities.
The Club has had a reasonable financial income result, apart
from the depreciation of the JPY, however the claims-side
has improved considerably, which seems to show the positive
results from the Loss Prevention efforts of the Club.
However, the Club has not been able to increase the fleet on
the Owners side, and has actually seen quite a reduction on
the Charterers side, so this part of the “JPI’s Change” plan
has not been accomplished.
Progress in this direction will hopefully be achieved by
the opening last autumn of an office in Singapore, that is
established to perform underwriting - and claims-service.
The Club expects that by operating this office they will not
only increase the membership, they also hope that it will
assist in having a better spread of members geographically as
well as country wise.
The Club has improved the financial performance, but still
has a way to go in relation to its ambition to increase the
owned tonnage of the club to GT 100 million
As the Club’s official accounts are expressed in JPY, the
reporting in USD is inaccurate due to the changes in the rate
of exchange from year to year.
2013/14 was the second year for the Medium Term Operational Plan “ JPI’s Change”,
and the Club almost performed according to the plan.
JAPAN CLUB
www.piclub.or.jp
Tonnage by Vessel Type Tonnage by Area*
*The percentages is by ship’s registry
5%2%2%
5%4%2%
2%6%
27
JAPAN CLUB
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
92 90 90 92
14 14 15 11
106 104 105 103
220111 20122 20133 2014
Entered Tonnage
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
231 252 245 259
- 206 200 182
209 207 190 191
22 -1 2 -10
-15 -3 28 25
158 167 158 156
2010/2011 2011/2012 2012/2013 2013/2014
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144
Original % 30 30 30 30 40 40 40 40 40 40
Final/Current 30 60 30 30 40 50 40 40 40 40
USD million
*The accounts for Japan Club are not easy to reconcile in USD as the clubhave their accounts in Yen, and there in the year has been considerable changes
in the rate of exchange between the two currencies.
Japan Club Consolidated Financial Year Summary*
Free Reserves
2007 91
2008 117
2009 124
2010 134
2011 158
2012 167
2013 158
2014 156
S&P Rating
2011 BBBpi
2012 BBB
2013 BBB+
2014 BBB+
USD million
28
AMERICAS
SOUTHERN EUROPE
NORTHERN EUROPE
ASIA
GENERAL CARGOGAS CARRIERS
BULK CARRIERS
CONTAINER VESSELS
TANKERS
The Club made a year surplus of USD 6.6 million, which
raised the Free Reserves to USD 160.6 million. This
increase was achieved due to a 7% return on investments,
whereas the underwriting result was negative, USD 18.7
million.
Investments made a profit of USD 24.4 million, which
was obtained due to the Clubs relatively high appetite for
investments risks. Of the invested capital 25.2% was in
stocks, 62.4% fixed income and 12.4% in cash and alternative
investments. By having a relative high exposure on the stock
market, the Club gained well on the worldwide recoveries of
the stock markets in 2013.
The Club had a moderate increase of the fleet, by adding
GT 2 million, so now standing at GT 43.3 million. Of the
vessels added to the Club almost 1/3 were new buildings, so
the average age of the entered owners’ tonnage is today just
under 9 years.
On the claims-side, the Club saw a further moderation in the
number of attritional claims, but the average cost of the claims
increased. There was also an increase of the medium and high
severity claims, so the total claims for the year reached USD
93 million, which is up USD 10.3 million, on the previous year.
At the renewal 2013, the Club had a General increase of
12.5% that raised the gross premium for the year to USD
106.9 million – net premium USD 86.1 million. Operating
expenses were stable at USD 11.9 million, however as
claims increased to USD 93.0 million, there was a total
expenditure of USD 104.9 million, which produced a
technical result of minus USD 18.8 million. A deterioration,
compared with the year before.
At the renewal 2014 the General Increase was 10%, and the
Club also sought to increase the deductibles.
The financial result for 2013/14 is consistent with the
Clubs mutual, not-for-profit business model, where
positive investment returns have a part to play in
achieving a balanced operating result. But at the same
time the Club’s underwriting plan targets improved
technical performance along with progress towards a
combined ratio which should produce a break-even
financial result or better.
For the financial year 2012/13 the Clubs business model
worked out fine with an operating surplus of USD 6.6
million, but the Club is heavily dependent on a high return
on investments, as the underwriting results have been
consistently negative for the last 5 year.
Even with a 10% General Increase at the 2014 renewal the
Club would need very good claims-figures to reach their
underwriting target of a break-even/or better.
All in all a positive year for the Club, that saw positive development for tonnage, premium and
investments, but a bigger deficit on the underwriting result.
www.lsso.com
LONDON CLUB
Tonnage by AreaTonnage by Vessel Type
3%2%
29
LONDON CLUB
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
39 41 41 43
5 5 5 5
44 46 46 48
220111 20122 20133 2014
Entered Tonnage
Free Reserves
2007 111
2008 81
2009 116
2010 141
2011 145
2012 145
2013 154
2014 161
S&P Rating
2011 BBBpi
2012 BBBpi
2013 BBBpi
2014 BBBpi
USD million
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
113 109 102 107
- 88 80 86
126 105 94 105
-10 -17 -14 -19
14 17 24 24
145 145 154 161
2010/2011 2011/2012 2012/2013 2013/2014
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144
Original % 40 40 40 40 40 40 0 0 0 0
Final/Current 40 89 89 75 40 40 0 0 0 0
USD million
London Club Consolidated Financial Year Summary
30
OTHER
NORTHERN EUROPE
SOUTHERN EUROPE
AMERICAS
MIDDLE EAST
ASIA PACIFIC
SCANDINAVIA
North has taken another great leap forward by finalizing the
merger with Sunderland Marine, and thereby creating
the North Group. The Group expects the total premium to be
USD 500 million with total assets of USD 1.500 million and
Free reserves of USD 350 million for the 2014/15 year. The
merger was approved 28 February 2014, so now the Group is
working hard at integrating the two entities to obtain the full
benefits of the merger.
Sunderland Marine, that has roots back to 1882, is a specialist
in fishing vessels, small crafts and aquaculture risks and it has
some 29 thousand policies in 50 countries, as well as offices
in Australia, Canada, the Netherlands, New Zealand, South
Africa and USA.
The merger has created a Group with greater diversification
of product lines, where cover can be offered World Wide to
all segments of shipping, from small fishing vessels to the
largest of ships.
In our Report this year we review the facts and figures for
North P&I Club only, as the effects of the merger will
only be visible in the figures for the present policy year
that ends 20/02/2015.
North had a good year, where premium increased to USD
383.5 million and the fleet increased 4% to GT 131 million
of own tonnage and almost GT 50 million charterers tonnage.
The Club experienced its two most expensive claims in 2013.
The M/V Start, a pollution and wreck removal case in South
Africa and the M/V Wu Yi San a collision with a Terminal
in South Korea. The total liabilities for these 2 claims are
expected to be USD 165 million, but due to the International
Pool and Re-insurance arrangements the Club will only bear
approximately USD 35 million of these costs.
Despite the two big claims the Club had a good claims year
with a reduction in the number and value of claims up to USD
1 million. Net claims reduced by USD 22 million to USD 231
million, which created a Combined Ratio of 90.1% - a good
improvement on the previous 2 years.
A surplus underwriting profit of USD 20.4 million was
achieved. The investments gave a return of 1.94% or USD 13.1
million, so in total the Club had a surplus of USD 33.5 million.
However, due to a change of how to record the Clubs Pension
obligations, a deficit of USD 33.5 million (due to unusually
low interest rates) had to be reported directly in the Clubs
balance sheet, so the surplus from the technical result and the
investments, was wiped out by the Pension reporting change.
But with no surplus – or loss the Club maintained the Free
Reserves at USD 312.2 million, which seems to be at the lower
end of the scale for a fleet of this size.
The Clubs has implemented a new organizational structure
designed to improve operational effectiveness and service.
The geographical teams have been restructured to five
areas: Americas and UK, Middle East and India, Asia
Pacific, Europe and Greece. It will be interesting to see
to which extent the former Sunderland offices will be
utilized by the Group.
Irrespective of the merger the Club - or now - the Northern
Group maintains its strategic vision to be “the most cost-
effective Marine insurance group providing the highest
levels of service”.
A busy and eventful year culminating with the historic merger with Sunderland Marine.
www.nepia.com
NORTH OF ENGLAND
TANKERS
OTHER
BULK CARRIERS
GENERAL CARGO
LNG
CAR CARRIERS
CONTAINER VESSELS
Tonnage by Vessel Type Tonnage by Area
2% 7%6%1%
2%4%
31
NORTH OF ENGLAND
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
105 123 127 131
45 40 43 49
150 163 170 180
220111 20122 20133 2014
Entered Tonnage
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144
Original % 0 0 0 0 0 0 0 0 30 20
Final/Current 0 0 0 0 0 0 0 0 30 20
Free Reserves
2007 190
2008 220
2009 211
2010 240
2011 312
2012 314
2013 312
2014 312
S&P Rating
2011 A
2012 A
2013 A
2014 A
USD million
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
314 346 365 385
- 291 295 307
258 297 305 273
57 -6 -10 20
16 14 9 13
312 314 312 312*
2010/2011 2011/2012 2012/2013 2013/2014
USD million
North of England Consolidated Financial Year Summary
* Reduced with USD 33,5 million due to pension obligations
32
AFRICA
OTHER
S.EAST ASIA & FAR EAST
AUSTRALIA, NZ, SOUTH PACIFIC
SOUTH,CENTRAL AMERICA
MIDDLE EAST & INDIA
EUROPE
CANADA & USA
Traditionally the Club has always focused on smaller
vessels, but the Club is now accepting dry cargo and
tankers up to GT 20,000 and within the offshore specialist
sector even larger units, with some barges entered over GT
30,000. This change is reflected in the tonnage by vessel type
where barges are now the largest group accounting for 31%
of the entered tonnage. It will be interesting to follow the
development in the Clubs portfolio going forward.
The Club has closed the Canadian branch in Vancouver, as
the volume of business was not sufficient to justify a full
service branch. On the other hand, a new branch has been
opened in Hong Kong, but in the first instance this will not
operate as a full service branch as the intention is to service
the Hong Kong members from Singapore in the short term.
The Club is still growing in a controlled way both in terms of
vessels entered and in tonnage. The number of vessels grew
by 1,118 or 3.4% to 33,899 vessels and the tonnage grew by
GT 1,7 million or 7.8% to GT 23,6 million, which is slightly
lower growth than last year.
The net premium grew by USD 13.0 million or 6.5% to USD
213.1 million. The total expenditures came to USD 210.8
million and the Club produced a positive underwriting result
of USD 2.3 million.
The Club reports that its absolute investment return on the
consolidated portfolio came to 4.4%, not much in the present
market, but a result of the portfolio consisting of 76% fixed
income securities and cash and 24% equities.
In order to secure a continued stable development the Club
have placed a three-year stop-loss cover with Swiss Re for
claims up to USD 1.5 million, with the previously existing
layers of reinsurance with Lloyd’s and Munich Re, covering
in excess of USD 4 million up to the Club’s retention on the
Pool of USD 9 million.
On the claims side the Club saw a continuation of the trend
also reported by other clubs of a greater number of larger
claims in the range of USD 1 million to USD 5 million. These
claims are now protected by the stop-loss cover and other
reinsurance facilities mentioned above, but that has of course
its price. However with the exception of cargo claims then all
claims categories have decreased in terms of USD per GT.
The club is presenting an acceptable result with combined ratio 98.9% and an increase
in the number of vessels entered.
SHIPOWNERS’ CLUB
www.shipownersclub.com
BARGES
YACHT
OFFSHORE
FISHING
PASSENGERVESSELS
HARBOUR
TANKERS
DRY CARGO
Tonnage by Vessel Type Tonnage by Area
8%
4%4%
2%
4%3%1%10%
33
SHIPOWNERS’ CLUB
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
18 20 22 24
- - - -
18 20 22 24
220111 20122 20133 2014
Entered Tonnage
Free Reserves
2007 130
2008 124
2009 96
2010 135
2011 188
2012 234
2013 276
2014 299
S&P Rating
2011 BBBpi
2012 A-
2013 A-
2014 A-
USD million
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144
Original % 25 25 10 10 10 0 0 0 0 0
Final/Current 0 0 0 0 0 0 0 0 0 0
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
200 216 227 244
174 190 200 213
145 161 191 211
25 29 9 2
27 18 32 21
188 235 276 299
2010/2011 2011/2012 2012/2013 2013/2014
USD million
Shipowners’ ClubConsolidatedFinancial YearSummary
34
EUROPE
AMERICAS
ASIA PACIFIC
TANKERS
OTHER
PASSENGER VESSELS
CONTAINER VESSELS
BULK CARRIERS & GENERAL CARGO
The Net premium has gone up by USD 45.1 million or
16,2 % and now stands at USD 322.8 million. Total
expenditures amount to USD 318.9 following an increase
of 15.2 percent leaving an underwriting surplus of USD 3.9
million. Together with the investment income of USD 27.1
million less taxes of USD 2.0 million, it raises the free reserves
by 8.5 % to USD 334.5 million.
With respect to investments Skuld still keeps a moderate
risk profile with the majority of the invested assets allocated
to low risk bonds. The consequence is a return of 5.4 % in
a year where the stock market generally has gone up by a
greater percentage. Contributions to the pool is based on the
individual clubs statistics. For 2014/15 the Clubs share of the
pool is 6.6% while the loss ratio adjusted contribution is 4.8%
meaning approximately 27% better than average. Therefore,
although the Pool Claims are random by nature, then some
clubs are over time hit harder than others and that is of course
why a loss ratio system has been implemented.
Skuld have abolished the use of general increases. However as
Members still see or feel that “general” increases are imposed
on them, we are still of the opinion that it would be fairer to the
members and in fact more in line with Skuld’s transparency
policy, if the Club announce general increases, now that in
reality they are there anyway.
At the 2014 renewal, Skuld lost market share in Turkey.
One reason was premium increases another being the
claims service. We are currently waiting to see if the Club’s
claims service will improve and respond with promptness
and suitability to the needs of their members. The Club’s
Annual Review for 2013 states “Service and Competence
You Can Rely On “which is exactly what is required going
forward. The heading of CEO’s Douglas Jacobsohn’s report
is: Diversification and a robust bottom line. No question
that for many of the clubs diversification has come to stay.
For Skuld the Lloyds syndicate “Skuld 1897” is important
and the expectation is that by 2020 commercial operations
will deliver half of Skuld’s premium income. One most hope
that at that time “Skuld 1897” will also contribute to positive
result. In 2013 the Lloyds Syndicate generated less premium
and higher operating expenses than in 2012 producing a loss
on USD 8.6 million. The Lloyds syndicate is still young but
the question is how many years will losses be tolerated on
a new business venture before it is necessary to review the
strategy. With the continued pressure on Hull & Machinery
rates it is difficult to see how this book of business can grow in
the current market conditions.
The Club has implemented a member bonus system. We have
been informed by the club that it has not declared any dividend
yet to owners. The dividend will be gradually built up as the
Club grows the Lloyd’s business. Each policy year in Lloyd’s
are “open” for three years before they close and dividends
are paid out. The Club has concluded the start-up phase of
the syndicate and expects positive results to be accumulated
going forward. The Club will monitor the performance and
consider on an annual basis if there are sufficient surpluses
from the individual policy years to distribute dividends. So no
accurate prediction of when dividend can be expected paid.
In April 2014 it was announced that Ståle Hansen was
appointed new CEO from the beginning of 2015. Ståle
Hansen has been with Skuld since 2002 and COO for
the latest four years. There is no doubt that he knows the
business extremely well and we wish him good luck in his new
position. Douglas Jacobsohn the present CEO will continue
as an Executive board member where it is understood, he will
be specifically committed to the 2020 goals of the club.
Also for 2013 Skuld is able to present an annual review with an underwriting surplus.
It is now the 11th year in a row that Skuld ends up with an underwriting surplus,
which is a record that will be difficult to beat. On the other hand an underwriting
surplus is necessary if Skuld wants to grow and that is the goal. More tonnage or rather
more business will require more capital, in particular higher free reserves.
www.skuld.com
SKULD
Tonnage by Vessel Type Tonnage by Area
8%
35
SKULDGT million
58 65 72 75
- - 18% 15%
220111 20122 20133 2014
Entered Tonnage
Skuld is no longer reporting fi xed business in GT. We are therefore reporting the fi xed business net premium in % of the total net premium
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
272 300 318 379
- 262 278 323
209 250 277 319
31 12 1 4
37 15 19 27
266 291 308 335
2010/2011 2011/2012 2012/2013* 2013/2014*
Free Reserves
2007 191
2008 204
2009 144
2010 202
2011 266
2012 291
2013 308
2014 335
S&P Rating
2011 A-
2012 A-
2013 A
2014 A
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144
Original % 0 0 0 0 0 0 0 0 0 0
Final/Current 0 0 0 0 0 0 0 0 0 0
USD million
USD million
Skuld Consolidated Financial Year Summary
*Skulds share of Syndicate 1897 is consolidated into the fi gures.
OWNED/MUTUAL
FIXED NET PREMIUM IN % OF TOTAL NET
PREMIUM
36
GREECE
JAPAN
USA
GERMANY
ITALY
CANADAREPUCLIC OF
KOREA
REST OF ASIA
REST OF THE WORLD
REST OF EUROPE
TANKERS
CONTAINER & GENERAL CARGO
OTHER
PASSENGER VESSELS & FERRY
OFFSHORE
DRY BULK
At the renewal 2014/15 the club announced a general
increase of 12.5% and if achieved then it must be
expected that the Club will return to underwriting surpluses
and a combined ratio below the magic 100.
Owned/mutual tonnage was stable with GT 95 million
while the chartered tonnage went down a little to GT
26 million. The reduction in the charter tonnage is not
affecting the net premium income that much as the
net premium increases were around 10%, no doubt a
consequence of general rate increases.
On the claims side the Club has, like other clubs, seen
that the total incurred claims cost being concentrated in a
relatively small number of large claims. The top 20 claims by
value, of which two have been notified to the Pool, accounted
for over two-third of the overall cost for the year. With respect
to a specific claims group the Club is reporting that the cost
of fines has increased substantially and that MARPOL claims
continue to be a source of concern.
The Club launched in 2012 covers for Kidnap and
Ransom, Traders and Intermediaries risks and is now
reporting significant interest from members and some
interest from non-members in these products. In April
2013 the Club launched a Hull facility with support of
leading London market hull underwriters and the club
is reporting that a number of covers have been bound,
without mentioning how many.
The Club has also launched a fixed premium P&I cover
with limits up to USD 500 million. This facility is now
the major reinsurer of Turkish P&I, a new fixed premium
facility you can read about in section III of this P&I report.
The investment portfolio of the club has not changed
much, consisting mainly of Sovereign Bonds (44%) and
Corporate Bonds (31%), while Equities is now (15%).
This reflects a fairly cautious investment policy, but
on the other hand the result is a return of only 0.6% in
a year where equities have gone up with much higher
percentages. As a consequence the net investment
income comes to only USD 10 million and with an
underwriting loss of USD 4 million the Clubs free
reserves have only increased by USD 6 million from USD
363 million to USD 369 million.
The Club improved its performance considerably ending up with a combined ratio of
101.5% and underwriting result minus USD 4 million - in contrast to the preceding year
where the combined ratio was 113% and underwriting result minus USD 40 million.
Tonnage by Vessel Type Tonnage by Area
STANDARD CLUB
www.standard-club.com
9%3%
12%
7%6%6%
22%
9%
37
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
85 95 105 105
38 29 30 26
123 124 135 131
220111 20122 20133 2014
Entered Tonnage
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
266 286 294 336
- 221 231 253
249 265 271 257
18 -44 -40 -4
56 47 50 10
317 353 363 369
2010/2011 2011/2012 2012/2013 2013/2014
Free Reserves
2007 217
2008 226
2009 176
2010 243
2011 317
2012 353
2013 363
2014 369
S&P Rating
2011 A
2012 A
2013 A
2014 A
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 22011 2012 2013 20144
Original % 0 0 0 0 0 0 0 0 0 0
Final/Current 0 0 0 0 0 0 0 0 0 0
USD million
USD million
Standard ClubConsolidatedFinancial YearSummary
STANDARD CLUB
38
FAR EAST
MIDDLE EAST & INDIAN SUB-CONTINENT
LATIN AMERICA
NORTH AMERICA
EUROPE
BULK CARRIERS
TANKERS
OTHER
GENERAL CARGO
CRUISE & FERRY
CONTAINER VESSELS
F or the 2013/14 policy year, the General Increase was
7.5%, which made the year end with a Combined
Ratio of 96.7%, a great improvement from a C/R of
112.5% the year before. The Club aims to have a 3 year
rolling C/R of 100%.
Owners tonnage increased from GT 65.3 million to GT 68.7
million and the Charterers book increased at renewal from
GT 37 million to GT 45 million, so a total fleet of GT 113.7
million. The Club has stated that “Growth is not a priority
for the Club”, however it has also stated that the Boards
target is to increase the tonnage 110% of the growth of the
IG as a whole. They reached their goal this year with a 5%
increase of the owned tonnage and indeed with the increase
of 22% on the Charterers business.
The gross premium for 2013/14 was USD 345.7 million, up
USD 30 million from the previous year.
The Club experienced a reduction of 22% in the costs of the
attritional claims up to USD 250.000, but saw that claims
in excess of this amount increase both in numbers and in
value, in particular the claims between USD 1.8 million and
USD 9 million. The Club experienced 2 pool claims in the
policy-year. Net claims for the year amounted to USD 232.4
million, down from USD 266.2 the year before, so producing
a technical surplus for the year of USD 9.3 million.
The Club has a conservative investment policy and in the
present market it yielded a modest return of 0.9 %, giving
a net of USD 5.7 million on the Non-Technical account.
Traditionally Steamship has not ventured into other lines
of insurance, but has now expressed that “if the risk profile
is acceptable and real benefits can accrue to ship-owners
then the board will give any proposal careful consideration”.
So the Club now intends to offer cover for War, Piracy and
related Hull risks, as well as for Kidnap and Ransom and War
P&I risks. This diversification is intended to reduce conflict
between underwriters providing separate coverage as it is
now all provided for under “one roof” and it is expected to
produce surplus both for the Club and the Members.
Steamship will also streamline its organization and
structure. Previously it operated 2 Clubs, SSM Bermuda
and SSM London. The intention is now to only operate
SSM London as the underwriting unit and SSM Bermuda
will continue as its re-insurer.
At the renewal 20.2.2014 the Club had a General Increase of
10% and also increased deductibles. There was a certain de-
selection of members as well, so with the streamlining of the
organization, a diversified product-line, higher deductibles
and premium, it looks very much as if Steamship have
paved the way for another positive year.
After 2 years with losses the Club now looks to be back on the right track by posting a
surplus of USD 14.9 million, increasing the Free Reserves to a total of USD 301.2 million.
Tonnage by Vessel Type Tonnage by Area
STEAMSHIP MUTUAL
www.simsl.com
6%3% 7%
39
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
58 63 65 69
34 30 37 45
92 93 102 114
220111 20122 20133 2014
Entered Tonnage
Free Reserves
2007 158
2008 186
2009 188
2010 252
2011 303
2012 296
2013 286
2014 301
S&P Rating
2011 A-
2012 A-
2013 A-
2014 A-
USD million
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144
Original % 0 0 0 0 0 0 0 0 0 0
Final/Current 0 12,5 14 20 0 0 0 0 0 0
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
316 330 315 346
268 278 271 285
246 319 305 336
21 -41 34 9
31 29 24 6
303 296 286 301
2010/2011 2011/2012 2012/2013 2013/2014
USD million
Steamship MutualConsolidatedFinancial YearSummary
STEAMSHIPMUTUAL
40
ASIA PACIFIC
OTHER
SOUTH EUROPE
NORTH EUROPE
BULK CARRIERS, GENERAL CARGO
& RO-RO
PASSENGERVESSELS
OTHER
TANKERS
CONTAINER VESSELS
T he combined ratio for P&I alone was 113% down
from 124% in 2012 clearly an improvement but still
on the high side.
Owned/mutual GT is reported to be GT 37.1 million, an
increase of GT 1.3 million and the fixed business GT 19.2
million bringing the total to GT 56.3 million a total increase
on GT 4.5 million or almost 9%.
The total consolidated calls and premiums came to USD
172.3 million and the net premium to USD 125.8. Although
the gross premium is increased with USD 2 million then
the net premium is reduced with USD 3.8 million. With
total expenditures on USD 117,7 million the club ends up
with an underwriting profit on USD 8.1 million.
On the investment side, the club maintained an 80/20 mix
between fixed income and equities. However with a over-
weighting in emerging markets and in consequence the
total return came to only 3% or USD 8.9 million opposed
to 7% or USD 22.4 million last year. The Club is report-
ing that the claims frequency is reduced during 2013, but
large claims continue to rise, a general pattern across most
of the IG clubs, although Swedish Club have had no Pool
claims in 2013. It also appears that claims within Marine
and Energy must have come down as the combined ratio
for that part of the business was 70% as opposed to 97%
for the preceding year.
The Club has reinforced its commitment to the Norwegian
market. The team has been increased and both marketing
and claims service is now offered from the office in Oslo
that mainly deals with the energy market. The energy sub-
class is now generating a profit.
Free access for members to Maritime Resource Manage-
ment training (MRM) is offered for a period of two years
in the belief that loss prevention training is the most ef-
fective tool available to reduce exposure to accidents. Yes,
training is probably an effective tool, but many owners or-
ganize training in one or the other way themselves and the
question you can raise is whether a P&I club necessarily
shall offer “free” training, which of course then is paid as a
general cost.
The Club managed to bring its consolidated combined ratio down to 94% from 110% in
2012 and produce a positive result on USD 17 million overall corresponding to an increase
on around 11% of the free reserves, although the finance income was not very impressive.
www.swedishclub.com
SWEDISH CLUB
Tonnage by Vessel Type Tonnage by Area
1%
41
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
31 34 35 37
16 16 16 19
47 50 51 56
220111 20122 20133 2014
Entered Tonnage
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
160 174 170 172
124 134 130 126
144 147 143 118
18 -12 -13 8
14 4 22 9
151 142 151 168
2010/2011 2011/2012 2012/2013 2013/2014
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144
Original % 0 0 0 0 0 0 0 0 0 0
Final/Current 0 35 35 0 0 0 0 0 0 0
Free Reserves
2007 102
2008 100
2009 107
2010 122
2011 151
2012 142
2013 151
2014 168
S&P Rating
2011 BBB
2012 BBB+
2013 BBB+
2014 BBB+
USD million
USD million
Swedish Club Consolidated Financial Year Summary*
* Include the H&M class of business
SWEDISH CLUB
42
EUROPE, MIDDLE EAST & AFRICA
AMERICAS
ASIA PACIFIC
BULK CARRIERS, GENERAL CARGO
PASSENGERVESSELS
OTHER
GAS CARRIERS
CONTAINER VESSELS
TANKERS
W ith the Club’s general increase of 10% where
approximately 7,5% was achieved, there is a hope that
next years Combined ratio will be below 100%, provided of
course that the club is not hit with an increase in claims not
covered by reinsurance.
The Club was successful in attracting further tonnage and
the owned/mutual book grew with additional GT 4 million to
GT 124 million. The chartered/fixed entry has for some years
been stable on GT 80 million and this year is no different.
The number of claims are going slightly down, but the average
cost of claims is increasing. Only one percent of the claims
exceed USD 0,5 million, but these claims represent 60% of
the total claims cost. Pool Claims are random by nature, but
on the other hand contributions to the pool is based on the
individual clubs statistics. For 2014/15 the Clubs share of the
pool is 11.0% while the loss ratio adjusted contribution 8.5%
meaning approximately 22% better than average.
In order to manage claims volatility the Club is buying
reinsurance to protect a surge in the frequency of the smaller
claims and the impact of a single major loss. That makes
sense as it levels out the impact of claims volatility .The Club
is not buying protection for the day-to-day claims as in the
long term that will always end up being more expensive than
picking up the claims one self.
The asset allocation of the Club is relatively conservative
and the result is an investment return of USD 36.4 Million
net of finance costs of USD 8.3 million. In the 2014 Report
& Accounts it is mentioned in the introduction that the
investment return is 4,5% (USD 44 million) but that figure
does not take into account finance cost.
With a combined ratio of 102% the underwriting loss came to
USD 6 million and with the investment return of USD 36,4
million and other adjustments, in particular an adjustment
on the Clubs cash flow hedging reserve of USD 5.9 million,
the free reserves are lifted from USD 494 million to USD 528
million, comprising the underlying free reserves of USD 430
million and hybrid capital of USD 98 million.
The Club is getting closer to its long term goal of achieving a combined ratio of 100% or
better with this years combined ratio being 102%. In recognition of the measures taken,
S&P have restored the Club’s A (stable) rating.
Tonnage by Vessel Type Tonnage by Area
www.ukpandi.com
UK CLUB
3%
5%
43
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
105 112 120 124
80 80 80 80
185 192 200 204
220111 20122 20133 2014
Entered Tonnage
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME*
TOTAL FREE RESERVES** ***
365 361 360 396
371 290 280 303
361 288 300 309
4 2 -21 -6
70 19 31 36
478 486 494 528
2010/2011 2011/2012 2012/2013 2013/2014
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144
Original % 0 0 0 0 0 0 0 0 0 0
Final/Current 0 20 25 25 0 0 0 0 0 0
Free Reserves
2007 263
2008 229
2009 334
2010 409
2011 478
2012 486
2013 494
2014 528
S&P Rating
2011 A-
2012 A-
2013 A-
2014 A
USD million
USD million
UK ClubConsolidatedFinancial YearSummary
*Investment income is net of fi nance costs USD 8,3 million**Include the Hybrid Capital raised in 2008. 2013/14 USD 98,3 million
*** Include for 2013/14 Cash fl ow hedging reserve USD 5.9 million and reduction in hybrid capital on USD 1,4 million
UK CLUB
44
BULK CARRIERS
FERRIES & PASSENGER VESSELS
OTHER
GENERAL CARGO/REEFERS
CONTAINER VESSELS
TANKER & OBO’S
The main contributor to the Clubs improved financial
performance is a continuing lower level of own claims,
very much helped by the Clubs decision at 2011 renewal to
reduce the exposure to some higher risk entries. This result
can be clearly seen as the Combined Loss Ratio since 2011
has gradually reduced from 118% to now 100.8%. In addition,
the Club has benefitted from a substantial reduction of its
contribution to the IG Pool Claims, where its share today is
5.88%, down from 14% some years ago.
The owned fleet grew almost 9% from GT 52.7 million in
2013 to GT 57.2 million after renewal 2014. The Charterers
entries have also had a good increase to an estimated GT 22
million .
In 2013 the Club established a facility for Fixed Premium
cover for vessels up to GT 5.000. It appears that the Club
has had limited success with this facility, but is of the
view that it enables the Club to compete more effectively
in specific markets, where commercial fixed premium
facilities may otherwise appear more attractive. However,
the Club also expresses that for this segment prudent
underwriting is essential.
On the financial side the Club had a return on investments
of 2% on invested capital, but due to an increased valuation
of the Clubs owned office at Tower Bridge in London, the
total return on assets stood at 3.4%, a total of USD 20.2
million. The Club has a very conservative investment
policy, and realizing a low return on some parts of the
portfolio during the year, the Club has slightly adjusted the
investment policy.
The Club performed very well during the year and seems
to be on target for their set goals with a 9% increase of the
owned tonnage, a 9.5% increase of the Free Reserves and a
Combined Loss Ratio of 100.8%.
However, the Club warns that all these positive factors
may not continue, so they express caution on the view
expressed by Brokers, that Clubs during difficult years for
the shipping-industry, should support their members by not
charging increases of the premiums, as the Clubs are already
Overcapitalized.
The Club states that “This view ignores the current
pressure of increased regulation and, even more so, pressure
from those same commentators for Clubs to maintain credit
ratings at a level regarded as “acceptable security”. Such a
requirement demands that premium levels are unlikely to be
capable of being relaxed”.
This would suggest the Club is clearly building up to a
renewal again with General increases.
For the 6th year in a row, the Club posted improvements in the underwriting result.
The Combined Ratio was 100.8%, well within the Clubs target of 105%. Also posting
a positive result on the financial side, the Club could add USD 18.8 million to the Free
Reserves that now stands at a comfortable USD 216. 2 million.
Tonnage by Vessel Type Tonnage by Area
www.westpandi.com
WEST OF ENGLAND
EUROPE
GREECE
AMERICAS
MIDDLE EAST & AFRICA
ASIA
3%2% 16%
45
GT million
OWNED/MUTUAL
CHARTERED/FIXED
TOTAL
49 51 53 57
20 15 18 22
69 66 71 79
220111 20122 20133 2014
Entered Tonnage
Supplementary Calls
Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144
Original % 20 20 20 20 20 30 30 30 35 35
Final/Current 35 55 55 65 20 30 30 30 35 35
Free Reserves
2007 205
2008 174
2009 161
2010 169
2011 183
2012 179
2013 197
2014 216
S&P Rating
2011 BBBpi
2012 BBB-
2013 BBB
2014 BBB
USD million
TOTAL CALL
NET PREMIUM
TOTAL EXPENDITURE
UNDERWRITING RESULT
INVESTMENT INCOME
TOTAL FREE RESERVES
243 212 196 203
- 179 166 167
280 194 171 168
-37 -16 4 -1
45 10 22 20
183 179 197 216
2010/2011 2011/2012 2012/2013 2013/2014
USD million
West of England ConsolidatedFinancial YearSummary
WEST OF ENGLAND
46
47
Omni is a leading marine insurance broker
offering a wide range of marine insur-
ance products to its clients. The fixed
premium market is a considerable part of
our business, therefore it is important that we have
a good working relationship and co-operation with
these market players, which is beneficial for both our
clients as well as business partners.
The number of fixed premium P&I insurers today
is more than the numbers of Clubs in the Interna-
tional Group. Even within the International Group,
some of the Clubs, such as Skuld, West of England
and Britannia have already started offering terms on
a fixed premium basis for certain type of tonnages.
This comes with lower limits than the IG Clubs but
still sufficient enough for the trade of certain ship
owners. This comes with the added advantage of no
exposure to any unbudgeted calls.
Each of these insurers, where some act as underwrit-
ing agencies, have their small differences which can
make themselves attractive for certain type of busi-
ness. The ever increasing number of P&I insurers
provide huge capacity for the brokers which can make
a broker’s life both easy and difficult. Easy on the
fact that Brokers’ are able to make available several
choices for their clients. Difficult on the basis that it
is inevitable that some underwriters will be upset as
only one of them would be winning the business.
With ever increasing underwriting capacity of fixed
premium insurers nowadays it is not just small ton-
nages being targeted any more. Although the fixed
premium insurers face the threat by the names of
long established Group Clubs, at the same time the
International Group has started to lose business of
larger tonnage to those insurers outside the Group.
So the fight is fierce.
It will be a big challenge for insurers in this market to
make a living due to high competition and over time
some might be forced into consolidations. Only time
will tell and it is now time to do some business!
III. OTHER P&I FACILITIES INCLUDING FIXED PREMIUM MARKET
48
Initially a mutual insurer, British Marine was demutual-
ized in 2000 and as of 2005, the company is a wholly-
owned subsidiary of the QBE Group, a major international
insurance group. The written gross premium of British
Marine within QBE is around USD 100 million for 2013
whereas the same of the QBE Group is USD 17.9 billion
(compared to USD 18.4 billion in 2012).
As a commercial insurer British Marine offers fixed cost
insurance backed by QBE’s “A+” rated security, whilst
maintaining the tradition of mutual insurance by provid-
ing a high level of service to their clients.
In 2011 BML decided to withdraw from the Turkish mar-
ket, which already is a hot spot for many P&I insurers, and
to this date this continues. The company currently has
7,500 vessels entered for P&I with income of USD 100
million gross premium. It appears the number of vessels
had to come down from last year due to global competition
among the fixed premium insurers.
BML have joined forces with the QBE offices in Asia to
create a unified P&I product for the Far East. “QBE Asia
P&I” will deliver an enhanced P&I offering to our Far
East based Assureds, with underwriting, claims and ad-
ministration being handled by a combination of BM and
QBE staff, based in Singapore. The British Marine terms
and conditions and claims handling philosophy will be
used and the expertise of the BM London office and QBE
Asia offices will be called upon to enhance service to As-
sureds and Brokers.
BM also writes a substantial book of small vessels’ H&M
business (100% basis and in house claims and processing).
Founded in 1876, British Marine specialises in underwriting P&I, H&M and FD&D
insurances for small to medium sized ships up to GT 10,000 with the ability to go up to
GT 20-25,000 if the profile fits.
BRITISH MARINE
www.britishmarine.com
Tonnage by Vessel Type Tonnage by Area
GENERAL CARGO
EUROPE
FISHING
UNITISED
YACHT CENTRAL AMERICA
SCANDINAVIA
OTHER OTHER
TANKERS
SOUTH AMERICA
BULK CARRIERS
MIDDLE EASTTUGS AND BARGES
SMOOTHWATER
FAR EAST
NORTH AMERICA
49
T indall Riley also manages the Britannia P&I Club,
which primarily focuses on larger ships. Carina was
launched on 1 March 2013 offering standard P&I cover for
owners and charterers of up to USD 50 million or USD 500
million at the insured’s option and also a number of ad-
ditional covers such as Contractual, Specialist Operations,
and Legal Assistance and Defence Cover.
Carina’s underwriting and claims teams have considerable
experience in the small ships market. They are backed up
by Tindall Riley’s comprehensive support functions, in-
cluding accounts, IT, risk management and documentary
services. Carina has a network of over 400 correspondents
worldwide to provide advice and assist insured’s in rela-
tion to any claim or casualty.
Carina has seen a significant increase in the number of
ships insured and growth in written premium since last
year and it is noted that as at July 2014, 4,250 ships are
insured with total GT of 2 million.
Cover is provided to shipowners worldwide with a focus on
ships up to GT 5,000.
The majority of the business gained to date has been in Eu-
rope and Asia although there has also been support from
brokers and owners in South America. Carina does not
write US business and most of the tonnage insured is trad-
ing locally or on inland waterways. A bespoke Carina yacht
policy was launched on 1 January 2014, which provides com-
prehensive P&I cover for yacht owners trading worldwide.
Carina continues to develop its business further in its ex-
isting and new markets.
Carina is the trading name of certain Lloyd’s underwriters (rated A+ by S&P) and is managed
by Tindall Riley Marine (UK) Limited trading as Carina Managers.
www.carinapandi.com
Tonnage by Vessel Type Tonnage by Area
TUG AND
BARGES
FAR EAST
FISHING
PASSENGERVESSELS
OTHER
GENERAL CARGO
RUSSIA AND UKRAINE
EUROPE
SOUTH AMERICA
TANKERS
CARINA
50
Having been established to meet the demands of smaller ship operators and with
security provided by the American Club, Eagle Ocean Marine has continued to see
stable growth over the past year, building their book of business whilst maintaining a
conservative approach to underwriting.
EAGLE OCEAN
MARINE
Tonnage by Vessel Type Tonnage by Area
TUG AND BARGES
TANKERS
GENERAL CARGOOTHER
FERRY AFRICA
EUROPEMIDDLE EASTSOUTH
EAST ASIA
BULK CARRIERS FAR EAST ASIA
www.eagleoceanmarine.com
The American Club’s recent S&P upgrade from BB+ to
BBB- (stable) is expected to increase the Eagle Ocean
Marine product.
Eagle Ocean Marine can provide cover up to USD 100
million for P&I. The company has seen a steady growth
of premium income with an estimate of USD 7 million
for 2013-14 with number of vessels reaching 268. Entered
tonnage is currently GT 590.000. Eagle Ocean Marine
continues to have a strong presence in China and South
East Asia, following a commitment by the American Club
to increase its representation in the area. Eagle Ocean
Marine has also benefited from having the ability to issue
American Club guarantees, enhancing its claims handling
service and American Club blue cards, which are recog-
nized worldwide.
CONTAINER VESSELS
RO/RO FISHING
AMERICAS
51
HANSEATIC P&IHanseatic P&I is an insurance consortium founded in 2005 with initially German
insurers however as of 2012, Hanseatic introduced various Lloyd’s Syndicates to its
primary consortium to further strengthen their capacity.
www.hanseatic-pandi.com
Tonnage by Vessel Type Tonnage by Area
GENERAL CARGO
EUROPE
BULK CARRIERS
TANKERS
OFFSHORE
OTHER
CONTAINER VESSELS
MIDDLE EAST
FAR EAST
SOUTH AMERICA
TUGS AND BARGES
Today the primary consortium is made of ANV, Novae,
Navigators and Torus, Hiscox along with Uniqa Osterre-
ich Versicherungs AG.
The reinsurance carriers are Allianz Global Corporate &
Speciality AG, Swiss Re and Lloyd’s of London.
Since its establishment the consortium has been fully
managed by Zeller Associates Management Services
GmbH, Hamburg with a representative office in London.
Hanseatic P&I is able to provide P&I cover for all types
of vessels with a limit up to USD 500 million. The mar-
kets Hanseatic serve are Europe, Russia, Turkey, Middle
East, North Africa and recently expanded to include Far
East and Asian Regions.
The cover risk appetite of Hanseatic P&I and
FDD are small and medium size general cargo and con-
tainer vessels as well as liquid cargo tankers and dry
bulkers. Additionally Hanseatic has an excellent under-
writing expertise for traditional, offshore, ports and ter-
minals and specialist vessels of any type.
In 2013 the Hanseatic P&I insured GT 2.8 million and
had a premium incomwe of USD 19.5 million, which rep-
resents a similar performance compared to 2012.
All the insurers and reinsurers in Hanseatic’s consortium
have A or AA ratings by Standard’s and Poor.
FISHING
OTHER
52
Ingosstrakh has been established in 1947 as an administrative division of the USSR
Ministry of Finance and now serves as a multi-line national insurer and leader in the
Russian insurance market. Standard & Poor’s rating for Ingosstrakh is “BBB- stable”.
Tonnage by Vessel Type
INGOSSTRAKH
www.ingos.ru
Being the oldest insurance company in Russia, Marine
division of the company offers both H&M insurance (in-
cluding Loss of Hire and Builders’ Risks) and P&I cover
(including CL and FD&D). Ingosstrakh holds 44% of the
Russian P&I market.
Ingosstrakh provides a standard P&I cover on a fixed pre-
mium basis and it’s protected by a reinsurance program
placed with London and international reinsurers. Starting
as from 1st January 2014 Ingosstrakh has increased limit of
liability for P&I up to USD 1 billion and become the only
P&I insurer in the Russian marine market offering such
limits. H&M capacity also increased to USD 100 million.
Ingosstrakh’s current portfolio consists mainly of owners/
operators from Russia, East-European Countries and Tur-
key even though about two thirds of Ingosstrakh’s ton-
nage fly foreign flags.
In 2013 Ingosstrakh not being a member of IG P&I Clubs
was included into the list of approved insurers in accord-
ance with the Notification of Ministry of Shipping of India.
Ingosstrakh covers a wide range of ships, from very small
inland operation vessels through to larger (in excess of GT
20,000) ocean going vessels. Ingosstrakh accepts various
types of vessels, but avoids passenger vessels carrying more
than 1,000 passengers or US flagged or crewed vessels.
In 2013 Ingosstrakh overall gross premium (including non-
marine) exceeded USD 2 billion. Marine claims for the
same period were settled in the amount of USD 26 million.
Tonnage by Area
RUSSIA
OTHER
UKRAINE
ST.VINCENT
CAMBODIA
BELIZE AZERBAIJAN
ST KITTS AND NEVIS
PANAMA
TUG AND BARGES
BULK CARRIERS
REEFER
TANKERS
FISHING
PASSENGER VESSELS
RO/RO
YACHTOTHER
DRY CARGO
CONTAINERVESSELS
53
Tonnage by Area
EUROPE
MIDDLE EAST
NORTH AMERICA
OTHER
Lodestar Marine is one of the newest and dynamic operations providing P&I Fixed
Premium Insurance solutions to owners, charterers and operators of small to medium
sized and specialist ships, including yachts, since late 2012.
www.lodestar-marine.com
LODESTARMARINE
It also provides shipowners and operators with additional
covers including Charterers Liability, Specialist Opera-
tions, Contractual Liabilities, Shipowners Liability (SOL),
Salvors’ Liability, War Risks and Defence Costs (FD&D).
Security of up to USD 100 million is provided by RSA,
with Lloyd’s of London and company market providing
further “A” rated security for limits up to USD 500 million
(USD 400 million in excess of USD 100 million).
In 2013, Lodestar has successfully written 1,700 vessels
with approximately GT 2.5 million producing a gross in-
come of USD 25 million. As of mid 2014 Lodestar has also
started offering hull and machinery and war risks insur-
ance however the security (in place of RSA) is via vari-
ous Lloyd’s syndicates currently being Ascot, Hardy and
Canopius as the leads. Lodestar is able to write large bulk
carriers up to 30,000 and it’s expected in time that they
will look at larger vessels as well.
The success of Lodestar is down to the strength of their
service and the experienced team. It is also noteworthy
that they have been accepted as a credible player in the
P&I market by major charterers and port authorities.
Tonnage by Vessel Type
CONTAINER VESSELS
GENERAL CARGO
FISHING OTHER
BULKCARRIERS
OFFSHORE
YACHT
TUGS AND BARGES
PASSENGERVESSELS
TANKERS
FAR EAST AND INDIA
SOUTH AMERICA
8%
54
Tonnage by Vessel Type Tonnage by Area
GENERAL CARGO
EUROPE
OTHER
TANKERS
OTHER
BULK CARRIERS
ASIA
TUG AND BARGESSOUTH AMERICA
MIDDLE EAST
CENTRAL AMERICA
www.navpandi.com
Navigators P&I is part of the Navigators Group, an international specialty insurance
holding company, with a strong competitive position and brand name in the marine
insurance segment of the property/casualty insurance industry.
NAVIGATORS
The group has solid underwriting expertise in its special-
ized niche and is one of the leading underwriters in the
U.S. and global marine insurance markets. Headquartered
in New York City, Navigators has offices in major insur-
ance centers in the United States, the United Kingdom
and Continental Europe, the newest office opened being
in Copenhagen. It also owns and operates Lloyd’s Syndi-
cate 1221.
The Group is very solid, with total assets in excess of USD
4 billion and gross written premium of USD 1.37 billion in
2013 and a statutory surplus of USD 804 million. It must
be noted that the Group is involved in many lines of busi-
ness such as Marine & Energy, Property and Casualty,
Management and Professional Liabilities. The combined
loss and expense ratio of marine business for both US and
UK offices is 87.3%.
Navigators, specialising on smaller tonnage and restricted
trading limits, has certain variations, exclusions under
their rules when compared to other similar insurance
providers. They think in their view these risks not to be
so important for the vessels they target, however we rec-
ommend the shipowners to check these exclusions with
their brokers if it suits their business. We also think it
is important to mention that among other fixed premium
providers that they do not require steel preloading surveys
to be carried out.
The P&I operations of Navigators are based in London
and insure about 1,600 vessels of about GT 2 million and
posted premium income for 2012 of USD 22 million. It in-
sures any type of vessels except passenger vessels, private
pleasure / yachts or US flagged vessels. Limit of liability
provided is USD 500 million and can insure vessels up to
GT 10,000 but exceptions made when larger vessels form
part of a fleet.
The Group has “A” Excellent by A.M. Best and A Strong
by Standard and Poor’s.
55
www.osprey-uwr.co.uk
Osprey has been established as an Underwriting Agency since 1991.
Head Office in London, a short distance from the Lloyd’s
of London Building, Osprey is the oldest provider of fixed
premium Protection and Indemnity Insurance (P&I) in
the London market.
Osprey Underwriting is able to offer P&I, Hull insurance
and Hull and P&I War Risks Insurance solutions to the
commercial marine industry.
Coverage is provided worldwide to owners of smaller craft
and vessels on a fixed limit, fixed premium basis. Osprey
covers a large variety of vessels from tugs &barges, offshore
supply vessels to submarine and research vessels. Dry car-
go vessels are covered up to GT 25,000 with a limit up to
USD 500 million any one accident or occurrence. However
hull limit is reduced to USD 5 million and USD 1 million
for IV showing their concentration on small crafts.
Coverage available to assured operating worldwide includ-
ing USA.
Osprey is an Agent of Underwriters at Lloyd’s and is au-
thorised under the terms of Binding Authorities to under-
write and administer claims on behalf of those supporting
Lloyd’s Underwriters. All Osprey products are Lloyd’s se-
curity. Lloyd’s of London is A+ rated by S&P, AM Best
and Fitch Rating Agencies.
The Agency has the ability to provide Lloyd’s letters of
Undertaking and access to a Bank Guarantee facility in the
event Security is required in a claim context.
Tonnage by Vessel Type Tonnage by Area
TUG AND BARGES
USA
PASSENGER/PLEASURE
CRAFT
MARINE CONTRACTERS
OTHER
CARRIBEAN
SOUTH AMERICA
AFRICA
OILFIELD
EUROPE
FISHING VESSELS
OSPREY
DRY CARGO
ASIA
56
RaetsMarine, founded in 1993, is a fixed premium P&I insurer with head office in Rotterdam
and subsidiaries in Paris, London and Singapore. RaetsMarine forms part of the Amlin Group.
Tonnage by Vessel Type Tonnage by Area
EUROPE
OTHER (SPECIALIST CRAFT)
SOUTH AMERICA
OTHER
YACHT
PASSENGER VESSELS
TANKERS
GENERAL CARGO
TUG&BARGES
BULKER CARRIERS
MIDDLE EAST
FAR EAST
FISHING VESSELS
RAETS MARINE
www.raetsmarine.com
RaetsMarine operates worldwide and targets small to me-
dium sized cargo vessels and has a special interest in in-
suring specialist craft. Products can be tailored to specific
needs and combination of products can be made by which
they aim to provide optimum service and support to their
clients. There are no restrictions as to vessel age and sin-
gletons will be quoted.
The P&I business forms 60% of the total business. In
2013 Raets covered GT 169 million / 47,200 vessels being
combined figures for both owned and chartered tonnage.
The anticipated combined premium turnover is expected
to be USD 90 million. RaetsMarine provides limits up to
USD 500 million.
RaetsMarine is one of the market leaders in Charterer’s
Liability Insurance. RaetsMarine can handle any type of
charterer and provides limits up to USD 500 million.
Amlin Europe N.V. has A- (stable) by Standard and Poor’s
and A+ (stable) by Fitch.
(Both numbers relates to any vessels entered irrespective
of time and not on annual pro rata basis)
18%
22%
57
Established in 1921, Rosgosstrakh Group of companies (RGS) is a major insurance
player in the Russian market with more than 45 million individuals and 240,000
corporate clients from all over the country.
www.rgs.ru
RGS has more than 100 000 personnel working from 83 re-
gional branches and 3 500 offices throughout Russia. The
group also comprises of Rosgosstrakh Bank.
RGS is the 81st largest company in Russia according to
Russian Rating Agency Expert Ra. It’s also the market
leader in terms of premium collected among Russian In-
surance companies, and as of 2012 also second in terms of
premium collected when it comes to Marine Insurance.
(USD 26 million in 2013 which is slightly higher than
2012).
RGS is rated BB-/ruAA- (Outlook stable) by S&P and has
been given the highest rating by Expert Ra (A++). P&I
portfolio is now reached almost GT 1.5 million , serving
the client with a P&I capacity of USD 500 million, placed
with reinsurers rated not less than A+ by S&P.
With the enhancement of the marine division in 2007,
RGS has developed a highly professional team of marine
claims handlers who have an average of 16 years hands-on
experience.
RGS also implemented an electronic claims system
named GURU similar to Lloyd’s (X-changing). RGS set-
tles around 300 marine claims a year, from personal injury
to catastrophic losses and complex General Average cases
with multiple parties involved. The total amount of reim-
bursements paid to the clients for the last three years is
estimated USD 45 million.
ROSGOSSTRAKH
Tonnage by Vessel Type Tonnage by Area
TANKERS
PASSENGER VESSELS
OTHERRO/RO
SUPPLY BOATS
ICE BREAKER
RUSSIA
BELIZE
CAMBODIA
OTHER
PANAMA
TUGS AND BARGES
DRY/GENERAL
CARGO
BULKER
RESEARCH
11%
58
Turk P& I Sigorta A.S. was established in December 2013 in order to ensure that all
cabotage ships have liability insurance with appropriate limits in accordance with the
international conventions.
Tonnage by Vessel Type
TUGS
FAST FERRY
PLEASURE CRAFT
OTHER DRY CARGO
PASSENGER FERRY
RO/RO
CAR FERRY
TURK P&I
www.turkpandi.com
It is owned by a consortium of six companies, three marine
related service providers (Omur Denizcilik A.S., Vitsan
Denizcilik A.S. and Metropole Denizcilik) and three state
owned insurance companies (Ziraat Sigorta A.S., Halk Sig-
orta A.S. and Gunes Sigorta A.S.) The Government does
not have a shareholding but have a representative on the
board of the company.
Turk P&I has been founded to provide Fixed Premium
Insurance solutions to vessels engaged primarily in cabo-
tage trade. Its portfolio consists mainly of owners/opera-
tors of small to medium sized ships however, it also has
insurance solutions to specialist ships, including passen-
ger crafts, yachts, diving boats and fishing vessels as well.
The P&I cover is protected by a reinsurance program with
limit of liability of up to USD 500 million.
The underwriting team consists of five underwriters and
from 20.02.2014 they welcomed 53 new Assured operating
324 vessels of various types. Turk P&I now works with 10
brokers on a global basis. The company has written USD
4.5 million premium within 3 months.
Besides providing insurance coverage to the cabotage
sector, Turk P&I has the goal of sharing information and
experience with the sector members and the Company is
working closely together with the government in achiev-
ing this goal.
Turk P&I offers its experiences to the Turkish Shipping
sector and became a leader in Turkish insurance market
by giving the best-quality P&I insurance product with the
highest-level liability limits.
59
60
61
62
NOTES
63
NOTES
64
Whilst every effort has been made to ensure that the information contained in the following report is accurate and up-to-date at the time of printing, this cannot be guaranteed by us.
Under no circumstances shall Omni Ltd. be responsible or liable for any loss or damage caused directly or indirectly by the use of this information.
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