At its annual board meeting on 29 October 2012, the board of the UK P&I Club (the Club), one of the oldest shipping protection and indemnity insurance mutuals, agreed that the general increase for 2013 renewal will be 7.5 per cent.The premium rating increase is in addition to any increase in the cost of the International Group reinsurance premium for 2013 for the mutual members, which will be determined in the New Year.
Recognising the challenges faced by its members and the Club’s strong capital position, the Board has separately declared a Mutual Premium Discount of 2.5 per cent on the total mutual call for the 2011 policy year. The discount will amount to a 10 per cent deduction for all mutual members for the final instalment of the 2011 call due in December this year.
In an environment of increasing claims costs despite a shipping recession, the Club needs to keep premiums moving forward in line with the actual claims experience. The general increase is a step towards addressing underlying claims inflation, as well as the anticipated future rebound in claims frequency from what have been record low levels.
Dino Caroussis, chairman of the UK P&I Club said: “The decision to make a 7.5 per cent general increase reflects the Board’s determination to keep the Club’s underwriting in balance. The Board has made the decision for a relatively modest premium increase in the short term as opposed to more substantial and painful increases in future.
Shipowners are facing extremely challenging conditions. We are therefore pleased, given our strong capital position, to be able to reduce the premium on 2011 which was a good year for the Club. However, the Board feels it would be clearly against the interest of members if a club does not increase premiums in an inflationary environment and potentially create a problem for the future.”
UK P&I Club
The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited is generally known as the UK P&I Club. As a mutual association since its establishment in 1869 the Club has existed solely for the benefit of its members. Its structure as a mutual insurance association enables it to respond to the changing needs of its assureds and allows it to provide superior service, attention and coverage.
The UK P&I Club is directed by the members. Overall control lies with the directors, elected by the members from amongst themselves. The directors normally meet four times a year to formulate policy on calls, the scope of cover, finance, underwriting and claims matters, reinsurance and issues affecting the P&I world. They resolve specific claims which may not fall clearly within the cover.
Thomas Miller, the Club’s managers, is organised to respond promptly to requests for assistance and to provide informed advice and help with members’ claims. Individual support goes far beyond that normally provided by a commercial insurer.
The UK Club’s size and the scale of the managers’ operations has enabled the latter to develop specialist skills and expertise seldom seen in marine P&I.
In 350 ports around the world, on-the-spot help and local expertise is always available to members and the masters of their ships from the Club’s 460 correspondents and claims handling services and advice from the network of offices and branches in London, Piraeus, New Jersey, San Francisco, Hong Kong, Singapore, Tokyo, Beijing and Shanghai.