North P&I Club directors decide on 5% general premium increase
Friday, 18 November 2011 | 00:00
Shipowner directors of the 150 million GT North P&I club have decided on a modest 5% general premium increase for protection and indemnity (P&I) cover at the February 2012 renewal. The increase reflects the board’s commitment to preserve the ‘A’ rated club’s financial strength in the face of global economic instability.
According to North’s chairman Pratap Shirke of Australian ship management group ASP, ‘With the outlook for the world economy remaining unstable, North continues to adopt a cautious approach, underpinning our objective of providing financial stability to members. We will be entering our 21st consecutive year without calling on members for unbudgeted supplementary funding and have every intention of maintaining this record. As such we have decided to apply a general increase of 5% to P&I premium rates for the 2012/13 policy year.’
Joint managing director Paul Jennings says, ‘The club’s claims experience in 2010/11 proved to be exceptionally favourable but early indications for the current year suggest that claims have returned to normal levels. The continuing volatile nature of claims and the increasing operational challenges faced by shipowners have been taken into consideration when assessing the general increase for 2012/13.’
Joint managing director Alan Wilson says, ‘North’s primary investment objective is to preserve capital and the directors remain of the view that the defensive policy adopted in 2008 should continue. At the half-year point, a positive contribution from the investment portfolio of 2% and a positive underwriting result is forecast to produce a modest increase in free reserves at February 2012. While the club’s position continues to develop in a satisfactory manner, we face difficult times ahead and the board is committed to maintaining the financial strength of the club, however we recognise the difficult market conditions our members face.’
North’s free reserves reached a record US$312.4 million at the February 2011 renewal. An update on the club’s finances and entered tonnage will be published shortly. Release calls have been set at 20% for the forthcoming policy year and the directors have decided to increase deductibles currently below US$25 000 by US$1000.
The board has also agreed to apply a general increase of 10% to freight, demurrage and defence (FD&D) premiums in 2012/13, but with no change in deductibles. Release calls are set at 20% ‘Shipping markets continue to be volatile and unstable and consequently the FD&D class continues to experience a high level of claim notifications,’ says Jennings. ‘The directors believe it is reasonable to assume that FD&D claims levels will not abate during 2012/13.’
North is a leading marine mutual liability insurer providing P&I, FD&D, war risks and ancillary insurance to 115 million GT of owned tonnage and 35 million GT of chartered tonnage, with 6000 ships entered by 400 members. It is based in Newcastle upon Tyne, UK with regional offices in Hong Kong, Piraeus and Singapore. The club is a leading member of the International Group of P&I Clubs, with approximately 12% of the group’s owned tonnage. The 13 group clubs provide liability cover for approximately 90% of the world’s ocean-going tonnage and, as a member of the group, North protects and promotes the interests of the international shipping industry.
Source: North P&I Club
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