Increase in all classes of premium (mutual and fixed-premium) starting on 20th February
The American Club said it was seeking a 5% increase in all classes of premium (mutual and fixed-premium) for both P&I and FD&D for the 2012 policy year starting on 20th February next.
At a meeting of the directors in New York, they said that there is no expectation of any unbudgeted supplementary calls for any open year.
However, they ordered the levying of the 25% supplementary call, as originally forecast, for 2011, for both mutual P&I (Class I) and FD&D (Class II) entries. The release call for the year will remain at 25% over and above the supplementary call.
In a post-board meeting circular to members, focusing on the club’s recent performance and prospects, Joe Hughes, chairman and ceo of Shipowners Claims Bureau, the managers, noted that freight markets continue to languish.
He said: “The current imbalance between supply and demand appears unlikely to experience a positive readjustment any time soon. Thus, shipping industry earnings are unlikely to rise significantly over the short term.
“However, depending on the extent to which the global economy avoids a further downturn and continues to expand, however modestly, over the next two years, there is hope that prospects will improve for 2013 and beyond,” he said.
Discussing underwriting, Hughes reported a steady – and deliberately prudent – growth in tonnage since last February’s renewal in all classes of business.
By mid-November, P&I tonnage had grown by about 6%, while tonnage entered under Class II (FD&D) and Class III (charterers’ insurance) had also increased.
At the same time, the club’s claims development for the current year was broadly tracking that of 2010, justifying a cautiously optimistic view for the future, notwithstanding the volatile and contrarian features of the current investment markets in which the club had been successful in achieving a 3.1% return since the beginning of the year.
As to the outlook, Hughes said the club’s positive experience over the last several months is to be welcomed: “However, and as was noted a year ago, higher claims volumes may well begin to reassert themselves over the medium to longer term,” he warned.
In a final comment, Hughes said that the unrelenting hostility of the political, regulatory and judicial environments will continue to assert a baleful influence on future P&I exposures. “These adverse circumstances will be compounded by the creeping extension of levels of shipowner liability under existing conventions and those likely to come into effect in the future,” he concluded.
Elsewhere, the London P&I Club has also set a general increase of 5% in annual P&I call rates for the 2012/2013 policy year.
Commenting on the background to the decision, Ian Gooch, chief executive of the club’s management team, said; “Prior open policy years are developing in line with expectations. In the current year the news is conflicting. On the one hand, we have seen some signs of increased claims activity, mainly involving cargo cases in the $100,000-$1 mill band.
“But at the same time we are finding that claims above that band, as well as at the attritional level, are currently running at lower levels than at the same stage in the two prior policy years. International Group Pool claims for the year are presently in line with expectations,” he said.
Source: Tanker Operator
