Robust development of recent years supported by strong operating results: Mutual club pedigree enhances Insurer’s stature in fixed premium sector
NEW YORK, JULY 20, 2015: Eagle Ocean Marine (EOM) – the specialist fixed premium P&I and FD&D (Freight, Demurrage and Defense) facility underwritten by the American Club – has reported a solid fourth year of operations, and a strong start to its fifth year of activity, following the successful renewal of its quota-share and excess of loss reinsurances with Lloyd’s underwriters as of July 1, 2015.
Over the past year, tonnage insured by Eagle Ocean Marine grew by nearly 20% over the figure for the previous twelve months, on a premium income of over $6 million. In addition, steadily rising levels of inquiries and orders indicate a promising outlook for EOM’s future development, despite strong competition in the sector.
At the operating level, EOM has continued to perform very well. Both the incidence and severity of claims has remained low, reflecting a prudent policy of risk selection and premium pricing. Results to date indicate a cumulative combined ratio of below 70%, connoting strong profitability for the Club and its reinsurers. This, together with confidence in EOM’s prospects generally, informed the recent renewal of the facility’s reinsurances which were completed on positive terms.
EOM supplies P&I and FD&D cover for the operators of smaller ships in local and regional trades. Providing P&I cover of up to $500 million per risk, it is aimed at owners who do not require, owing to the characteristics of their trade, the high limits of cover provided by the mutual system, and who prefer a fixed premium approach to their insurance needs.
EOM insures ships from all over the world except the United States. More than 70% of its business is derived from Asia, with the remainder originating for the most part from Europe, Latin America and Africa. The facility’s tonnage by vessel type is broadly based, made up of tankers, general cargo vessels, bulk carriers and tug and barge business in approximately equal shares.
Speaking in New York recently, Joe Hughes, Chairman and CEO of Eagle Ocean Agencies, Inc. which operates the facility, was upbeat:
“We are very pleased that Eagle Ocean Marine continues to do well. Its recent years’ results have been excellent: premium income, market share and operating results all continue to exhibit a positive trajectory, and augur well for the future. The recent increase in the limit of cover available under the facility to $500 million will continue to make it an attractive option to those who prefer a fixed premium solution to their P&I needs. We are determined to make EOM a growing success for all its stakeholders: its insureds, the Club, its reinsurers and its many other business associates.
“We continue to take the long view when it comes to developing market share. The EOM business model is based on careful risk selection, sensible pricing, effective loss prevention and unsurpassed claims service. It is inspired by the traditions of classic P&I mutuality. EOM seeks to occupy a special place in the fixed premium sector for those who desire a gold standard of service. We are confident that EOM will enjoy increasing success over the years ahead, ” Hughes added.
The American Club
American Steamship Owners Mutual Protection and Indemnity Association, Inc. (the American Club) was established in New York in 1917. It is the only mutual Protection and Indemnity Club domiciled in the entire Americas and its headquarters are in New York, USA.
The American Club has been successful in recent years in building on its US heritage to create a truly international insurer with a global reach second-to-none in the industry. Day to day management of the American Club is provided by Shipowners Claims Bureau, Inc. (SCB) also headquartered in New York. Eagle Ocean Agencies, Inc. an affiliate of SCB, manages the Eagle Ocean Marine (EOM) fixed premium brand of the Club’s business.
The Club is able to provide local service for its members across all time zones, communicating in eleven languages, and has subsidiary offices located in London, Piraeus, Hong Kong, Shanghai and Dalian, plus a worldwide network of correspondents.
The Club is a member of the International Group of P&I Clubs, a collective of thirteen mutuals which together provide Protection and Indemnity insurance for some 90% of all world shipping.
Protection and Indemnity insurance (commonly referred to as “P&I”) provides cover to shipowners and charterers against third-party liabilities encountered in their commercial operations; typical exposures include damage to cargo, pollution, death/injury or illness of passengers or crew or damage to docks and other installations.
Running in parallel with a ship’s hull and machinery cover, traditional P&I cover distinguishes itself from usual forms of marine insurance by being based on the not-for-profit principle of mutuality where Members of the Club are both the insurers and the assureds.
Freight, Demurrage & Defense insurance, often referred to as “FD&D” or simply “Defense, ” provides members with cover for claims handling assistance and for legal costs in relation to a wide range of disputes. Such disputes are outside the scope of P&I or H&M (Hull and Machinery) insurance and arise from the building, buying, selling, owning or operation of a vessel.