OUTLOOK STABLE

S t a n d a rd & Poor’s, the intern a t i o n a l l yrenowned rating agency, has assigned ani n c reased financial strength rating to theAmerican Club which becomes a Standard &P o o r’s Security Circle Insurer placing it with-in one of the agency’s top four categories forfinancial security.

Members, their brokers and all of the Club’smany other friends will take pleasure in thisrecognition of the Club’s considerable finan-cial strengths, the achievement of its re c e n tstrategic goals and the agency’s expectationthat the Club will continue to grow success-fully in the future .

The following press release was issued by Standard & Poor’s on Tu e s d a y, J a n u a ry 16, 2001.

NEW YORK (Standard & Poor’s Cre d i t Wi re )J a n u a ry 16, 2001–Standard & Poor’s todayassigned its triple ‘B’ plus counterparty cre d i tand financial strength ratings to AmericanSteamship Owners Mutual P&I Assn. Inc.(American Club). The outlook is stable.

The ratings reflect

A M E R I CAN CLUB’S

l o n g , successful

p e r formance re c o rd , ex t re m e l y

s t rong capitalizat i o n , s t rong

underwriting pro f i t a b i l i t y, a n d

g rowing fra n c h i s e .

I S S U E N U M B E R 1 4 • F E B RU A RY 2 0 0 1

★★

T H E A M E R I C A N C L U B

1

ACCURRENTSACCURRENTS

Continued on page 2

The ratings reflect American Club’s long,successful perf o rmance re c o rd, extre m e l ys t rong capitalization, strong underw r i t i n gp ro f i t a b i l i t y, and growing franchise. Off s e t-ting these strengths were the Club’s modestmarket position, reduced operating pro f i t a b i l-i t y, and challenging competitive enviro n-m e n t .

American Club, founded in 1917, is the onlymutual protection and indemnity provider inthe Americas. Management of the businessis under an annual (though longstanding)a g reement with the Shipowners ClaimsB u reau, Inc.

MAJOR RATING FACTORS :

• E x t remely strong capital adequacy. AC’s175% capital adequacy ratio as of Decem-ber 31, 1999, which is based on Standard& Poor’s capital adequacy model, ise x t remely strong. Reserves are carr i e dwithin the actuarially determined rangefor the company’s liability.

AMERICAN CLUBASSIGNED BBB+ RATINGS

I N S I D EClaims Analysis . . . . . . . . . . . . . . .Page 2

St. Lukes Emergency Care. . .Page 3

Stay Alert for Safety . . . . . . . . .Page 4

Don Messick/JAT. . . . . . . . . . . . .Page 5

Hatch Accidents . . . . . . . . . . . .Page 6

American Steamship Owner sMutual Protection and IndemnityAssociation,Inc.

Shipowners Claims Bureau,Inc.,MANAGER

Sixty Broad Street 37th FloorNew York,New York 10004

212 847-4500212 847-4599 (Fax)

f u t u re goals are to continueto develop the re l a t i o n s h i p sbetween the groups, devel-

op geography-specific pre-spill NaturalR e s o u rce Damage Assessment (NRDA)planning exercises, develop writtena g reements between trustees andi n d u s t ry, and foster joint understandingof the principles and applications ofbasic restoration methodologies andeconomic valuation techniques.

The group meets 3 to 4 times a yearw h e re it discusses assessment method-ology on case specific matters as wellas specific restoration needs within theregion. Substantial pro g ress has beenmade in the past in clarifying the ro l e sof the various trustees as they impactthe NRDA process and integrating thet rustees’ concerns with those of theresponsible parties. This approach leadsto more streamlined and eff i c i e n timplementation of emergency assess-ment and restoration activities thusreducing the overall net costs.

The American Club is pleased tohave been asked to join this uniqueassociation between several stateand federal natural re s o u rce tru s t e eagencies and several major oil com-panies for the purpose of impro v i n gthe effectiveness and efficiency ofconducting natural re s o u rce injuryand damage assessments.

Donald Messick,Vice President ofShipowners ClaimsB u reau, Inc., was invited to addre s sthe January meeting of the JointAssessment Team (JAT) on “ M a r i n eInsurance and the Role of the P&IClub in Natural Resource DamageAssessment (NRDA).”

Under the National Oceanic andAtmospheric Administration (NOAA)Damage Assessment rule (15 CFR Part990), trustees are re q u i red to invitepotentially responsible parties (PRP’s )to participate if the trustees decide topursue a natural re s o u rce damageassessment. However, since there areno provisions or guidelines to makethis potentially cooperative eff o rt work,N R D A’s have become adversarial legalbattles involving many scientists, attor-neys, economists, and managers whos t ruggle through years of duplicativestudies and difficult negotiations. In1996, in an eff o rt to resolve this pro b-lem, the Joint Assessment Team (JAT )was form e d .

The JAT is a cooperative workingg roup consisting of re p resentatives ofseveral natural re s o u rce trustee agen-cies and several major oil companiesdoing business on the west coast ofN o rth America. Thus far, the team hasi m p roved the working re l a t i o n s h i p samong the trustees and oil companies,discussed how each agency and com-pany is organized and the role eachplays if an oil spill occurs, reached con-siderable consensus on how thet rustees will interact with a companyin the event of a spill, and shared inthe review of oil-spill response anddamage assessment documents. Its

5

Upcoming E v e n t s

BOARD MEETINGS:

M a rch 8, 2001 - New York

September 13, 2001 - New Yo r k

November 8, 2001 - Singapore

ANNUAL GENERAL MEETING

June 14, 2001 - New Yo r k

S t a ff News

Welcome aboard to Jennifer Donato, secre t a ry in

the New York office, who joined us in November.

J A TJOINT ASSESSMENT TEAM

DON MESSICKA d d resses Joint Assessment Te a m

“The A m e r i c a nClub is pleased to

h ave been asked tojoin this unique

a s s o c i at i o n … ”

★★★★

★★★★

J A T

A n a l ysis of Claims 1995-2000A n a l ysis of Claims 1990-1994

2

• Successful track re c o rd with goodstrategic planning. American Clubhas operated successfully for morethan 80 years, but unlike many otheri n s u rers, it has launched and success-fully implemented a solid plan tobuild on that legacy. The Vision 2000plan has spurred American Club togain market presence, improve thediversification of its entered tonnage,and position itself competitively forthe future .

• S t rong operating pro f i t a b i l i t y.Though lower in 1999 and 2000,American Club has a strong re c o rd ofu n d e rwriting profitability despite itsU.S. domicile, which is one of themost strictly regulated operatinge n v i ronments. With a five-year aver-age combined ratio of 102.8%, Amer-ican Club has achieved an enviabletrack re c o rd despite a relative lack ofeconomies of scale and a soft markete n v i ro n m e n t .

• Modest market position. AmericanClub is among the smaller pro t e c t i o n

and indemnity providers, and despitea period of rapid growth and diversi-fication, it remains a smaller competi-tor within its peer gro u p .

• Reduced operating pro f i t a b i l i t y.American Club’s operating perf o r-mance has deteriorated in 1998 and1999 because of weak market con-ditions and the cost of buildingmarket share within difficult mar-kets. Rate increases have been imple-mented across the board in each ofthe past two renewals, and the deter-ioration in underwriting results isexpected to be short term.

• American Steamship Owners MutualP&I Assn. Inc. is a Security Circ l ei n s u re r, which means that it voluntar-ily underwent Standard & Poor’smost comprehensive analysis andwas assigned ratings in one of the topfour categories for financial security.

O U T L O O K : STABLE

American Club has been aggressive inlaunching a strategic plan for diversified

g rowth during aperiod of weakpricing and highcompetition, with aresulting drag onc u rrent earn i n g s .H o w e v e r, as a

mutual, S t a n d a rd &

P o o r’s believes thestrategy has con-

tributed to a stro n g e rfranchise with greater fre e

re s e rves, an improved market position,and better prospects. American Club isexpected to continue growing success-f u l l y, with higher pricing and a re t u rnto heightened profitability as marketconditions improve, Standard & Poor’ssaid. Cre d i t Wi re .

CREDIT PRO F I L E :

NEW RAT I N G S

American Steamship Owners MutualP rotection and Indemnity Assn. Inc.

C o u n t e r p a rt credit rtg: B+/Stable

Financial strength rtg: BBB+

Continued from page 1

CARGO 36%

INJURY/ILLNESS

33%

OIL POLLUTION

4%

COLLISION/F.F.O.

13%

MISC.7%FD&D 7%

CARGO 18%

COLLISION/F.F.O.

15%

MISC. 4%

INJURY/ILLNESS

60%

OIL POLLUTION

3%

A N A LYSIS OF REPORTED CLAIMSThe following charts re p resent an analysis of claims re p o rted to the Club in the 1900-1994 vs 1995-2000 policy years.It is interesting to note that the percentage of personal injuries has fallen from 60 to 33%, whereas cargo claims have

risen from 18 to 36%. Most of this is probably attributable to the Club’s growth internationally since 1994.

3

L I F E B O ATS t . L u ke ’s Providing E m e rgency Care for Locally Owned Ship FleetThe American Club’s Safety Committeehas been looking at how Members dealwith illness and personal injurieso n b o a rd vessels at sea and in fore i g np o rts. One Member, Sabine Tr a n s p o rt a-tion Company of Cedar Rapids, Iowahas chosen to ally itself with the localhospital, which not only provides emer-gency service, but also conducts allc rew pre-employment physicals. Allc rew medical re c o rds are held by St.L u k e ’s Hospital, where they are imme-diately available when emerg e n c yadvice is re q u i red. The following art i c l eis by Guest Columnist Jeff rey Haag,Public Relations Specialist, St. Luke’sHospital, Cedar Rapids, Iowa:

The cliché that the world has neverbeen smaller is exactly that for the menand women aboard 11f a r-flung carg oships owned by Sabine Tr a n s p o rt a t i o nof Cedar Rapids.

Sailing the world’s oceans and water-ways for months at a time not only cre-ates a tremendous sense of isolation,but also carries with it the inherent riskthat ord i n a ry health concerns maydevelop into something potentially dan-g e rous - especially when not diagnosedand treated quickly and eff e c t i v e l y.

“This is a very risky business and a lotcan go wrong,” says Christine Card e n ,Claims Manager for Sabine of CedarRapids. “Knowing we can count on St.L u k e ’s is also consistent with our philos-ophy of supporting our communitywhen the opportunity arises.”

Christine says St. Luke’s “great re p u t a-tion” was a selling point for her compa-n y. “We believed working with themguaranteed us the highest-quality equip-

ment, services and staff. And, the tru t his, they’ve exceeded our expectations.”

S a b i n e ’s vessels, no matter where theya re in the world, can contact St. Luke’sat any time using cell phones, e-mails,faxes or telexes. The ships even carrydigital cameras, which permit almostreal-time images to be exchanged.

Each day, Stickle e-mails the positions ofall its vessels around the world–as closeto home as the Gulf of Mexico or as faraway and the Indian Ocean–to LauraSagers, St. Luke’s Emergency Depart-ment manager. By design, there are nom i d d l e m e n .

“ T h e re is a level of comfort dealingwith St. Luke’s as a single source,” saysChristine. “We don’t have to worry somuch about our crewmembers beingstranded without medical assistance orreinvent the wheel with a new hospitalor physician each time we need them.When that beeper goes off, all the tech-nicalities are behind us and St. Luke’sknows the route it has to take.”

The hospital meanwhile, maintainsdetailed medical re c o rds for all Sabinec rewmembers. “The ships contact usand explain the symptoms someonemight be suffering from,” says Laura.“Based on what we know about thecondition and patient, we then adviseon pro c e d u res. We can usually tre a tthe situation with medications alre a d yo n b o a rd or, worst case, we may suggestd i v e rting the ship to a port as soon asp o s s i b l e . ”

Although the majority of cases St.L u k e ’s deals with are fairly ro u t i n e ,t h e re have been occasions where shipshave been directed to port andc rewmembers hospitalized–sometimesin extremely remote locations. In onememorable case, emergency physicianDonald Linder, DO, flew from CedarRapids to Djibouti, a city on the barre nd e s e rts of the eastern coast of Africa, to

e s c o rt a crewmember back to his homein Portland, Ore g o n .

Because the Coast Guard re q u i re sm a n d a t o ry drug screenings for all sea-going personnel, Sabine also contractswith St. Luke’s Employee AssistanceP rogram to provide laboratory drug test-ing, and if the need arises, counseling.

For its part, St. Luke’s has been aggre s-sive in modifying its services to fit thedemands of this unique situation. “Thec h a rge nurses and ER physicians aree x t remely prompt responding to calls,”Christine says. “They’ve also helped usstock and update the medical inventorywe have onboard each ship and haveeven recommended supplements to theWorld Health Organization list of medi-cines in each ship’s medicine chest.”

Laura believes St. Luke’s extraord i n a ryrelationship with Sabine positivelyreflects the dedication the hospital hasto the communities it serves on dryland. “There are no defined boundarieswhen it comes to providing qualityh e a l t h c a re,” she says. “We ’ re alwayslooking at new ways of serving thosewho need us, including non-traditionalpatients who might be half a worlda w a y. ”

Christine agrees: “It’s hard to find thekind of personal care we’ve re c e i v e df rom St. Luke’s. We are extre m e l ya p p reciative of the personal commit-ment of the entire staff and the qualityof care they’ve pro v i d e d . ”

Other emergency medical advisory systemsrecommended by Club Members are :

The George Washington University MedicalC e n t e r, Washington, D.C. (202) 994-6000

I n t e rnational Radio-Medical Centre(C.I.R.M.), Rome, Italy 39 06-592-3331-2

Maritime Health Services, Inc., Seattle, WA .(206) 781-8770

Medical Telecommunications Pro t o c o l s ,Washington, D.C. (410) 257-9504

S TAY A L E RT FOR SAFETY!

B e f o re Sleep• Once you’re off watch, let your

body wind down so you’re re l a x e dand ready for sleep.

• D o n ’t overeat. If you’re hungry,have a light snack, such as cere a l ,f ruit, or peanut butter. Avoid spicyf o o d s .

• Drink a caff e i n e - f ree beverage likew a t e r, warm milk or hot herbal tea.

• R e l a x – read or listen to music. Diml i g h t s .

Be Good To Your Body• Try to arrange your schedule so you

can sleep about the same time andamount every day.

• Eat healthy meals. Avoid too manysweets and fatty foods.

• Avoid medications that caused rowsiness˜–these can make youfeel groggy all day.

• E x e rcise at least 30 minutes 3-4days a week.

B e f o re Wa t c h• Take some time before watch to

“ rev up” and wake up your mindand body.

• Tu rn on lights.

• S t retch your body to “wake up”m u s c l e s .

• Eat a well-balanced meal (includemeats, breads, fruits, and vegetable,but avoid too many sweets).

On Wa t c h• I t ’s important to be fully rested and

stay alert so you can work safely.

• Wear appropriate work clothes soyou don’t get too hot or too cold.

• Tu rn on music or talk withc rewmembers to keep your alert-ness level high.

• Keep moving/walk around. Evenshifting your weight from one footto another helps keep you alert .

I M P O RTA N T: Caffeine (in sodas andc o ffee) and nicotine (in cigarettes) maymake you feel more awake and alert ,but the effects wear off after a coupleof hours. Cutting down on caff e i n eand nicotine 3-4 hours before bed willhelp you sleep much better.

4

In a round-the-clock business like marine t r a n s p o rt a t i o n , working saf e l y means S TAYING A L E RT ! …HERE ARE SOME T I P S you can use,

on the boat and off, to protect yourselfand stay alert for safety.

At Home• Take advantage of your time off

work and catch up on sleep.

• Pace yourself! Don’t try to cramtwo weeks’ worth of activities intothe week before you go back tow o r k .

This foregoing was reprinted with p e rmission from a bro c h u re jointlyp roduced as part of the Coast Guard -AWO Safety Partnership.

For further information, please contact:

The American Wa t e rways Operators1600 Wilson Boulevard, Suite 1000Arlington, VA 22209(703) 841-9300w w w. a m e r i c a n w a t e rw a y s . c o m

U.S. Coast GuardHuman Element and Ship Design Division( G - M S E - 1 )2100 Second Street, S.W.Washington, D.C. 20593-0001(202) 267-2997w w w. u s c g . m i l / h q / g - m / n m c / p t p / p t p-p a rt / a w o . h t m

S TAY A L E RT FOR SAFETY!

Sixty Broad Street 37th FloorNew York,New York 10004

The Club has recently encountered several cases of sea-men falling into open hatches. In one case, the seaman isnow paraplegic. In another, a man fell to his death.

An engineer on a tug was engaged in lowering a new tur-b o c h a rger housing into the lower engine room. The turbo-housing was to be lowered through an opening in the 0-1level and then through an opening in the upper engineroom and into the lower engine room. Hatch covers hadbeen removed from the 0-1 deck and upper engine ro o mdeck through which the turbo housing could be lowere dby a crane. The engineer himself participated in re m o v i n gthe hatch covers.

The company’s written safety pro c e d u res called for the rig-ging of lifelines around open hatches, and there were stan-chions right at hand, but the personnel involved agre e dnot to rig them because they planned to replace the hatchcover immediately. However, due to their inability tolocate the shackles necessary to lower the unit, the opera-tion was delayed. While one of them was looking forshackles, the engineer went to his room to retrieve a gas-ket. On his way back, as he carried the box containing the

gasket in front of him, the engineer fell right though theopen hatch in the upper engine room. He fell 15 feet, andwas re n d e red paraplegic.

In another case, a third mate was attempting to attach aw i re to a padeye affixed to a MacGregor hatch cover,when he either tripped or slipped off the coaming headand fell into the hold, killing him instantly. An autopsylater determined that the man was under the influence ofalcohol when the accident occurre d .

IF THERE IS AN OPENING A N Y W H E R E :G UARD IT, LIGHT IT AND PASS THE WORD!

Safety chains should always be rigged, warning signs post-ed, and the area clearly illuminated whenever hatches areopen, or there are any open spaces in the deck. It is alsoobvious that no one should re p o rt for duty under the influ-ence of alcohol.

F a l l i n g T H ROUGH OPEN HAT C H E S