American Club Seeks Premium Hike

press release
Wednesday, November 23, 2011

The American Club is 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 that starts on February 20 next.

 

• S&P rating upgrade
• Steady growth in tonnage continues
• Solid operating results maintained
• Claims inflation a longer-term trend

 

This was decided by the directors when they met in New York. There is no expectation of any unbudgeted supplementary calls for any open year. However, the directors 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.

 

Last week, it was announced that S&P had raised its counterparty credit and financial strength rating on the American Club a full notch to BB+, with a stable outlook, from BB. S&P referred, inter alia, to the club’s improved risk-based capital adequacy, improved underwriting results and its prospects for future growth, given what S&P considered to be a good competitive position for the club.

 

Specifically, the agency noted that the club’s statutory surplus had grown significantly, from $48.2m to $71.4m, from year-end 2009 to year-end 2010.

 

In a post-board meeting circular to members that focuses on the club’s recent performance and prospects. Joe Hughes, chairman and ceo of Shipowners Claims Bureau Inc., the managers, notes that freight markets continue to languish. He says: “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.” Discussing underwriting, Mr Hughes reports 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 present, total tonnage for P&I is approaching 17m gt and 11m gt for FD&D. The Asian portfolio has grown substantially, now accounting for about one-third of total entered tonnage.)

 

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, Mr Hughes says the club’s positive experience over the last several months is to be welcomed, reflected in the S&P rating upgrade. “However, and as was noted a year ago, higher claims volumes may well begin to reassert themselves over the medium to longer term.”

 

There are several drivers of such claims inflation, notably a growing systemic risk implied by the continuing expansion of the world merchant fleet coupled with increasing ship utilisation and rising commodity prices. Mr Hughes also notes that levels of investment earnings will remain uncertain. “Accordingly, the need to ensure the appropriate pricing of risk as the basis for self-sustaining results at the operating level will continue to assume great importance over the years ahead,” he says.

 

In a final comment, Mr Hughes says 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.”

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter January 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Hapag-Lloyd Sees Uptick of Incorrectly Declared Dangerous Goods

Year-on-year increase of 65 percent; more than 4,300 cases worldwide   Container shipper Hapag-Lloyd said it registered considerably more incorrectly declared dangerous goods last year,

Baltic Index Touches New Record Low

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying industrial commodities, registered a new all-time low on Monday on muted vessel demand.

SevenCs Supports MariGreen Project

SevenCs is part of the EU INTERREG V A cross-border project “MariGreen” to support the maritime industry in the transition towards more efficient, greener and more sustainable shipping.

Finance

Baltic Index Touches New Record Low

The Baltic Exchange's main sea freight index, which tracks rates for ships carrying industrial commodities, registered a new all-time low on Monday on muted vessel demand.

Oversupplied Market Eyes Floating Storage Opportunities

Brent oil price reached lows of $27/bbl in mid-January, but has recovered over the past two weeks to above the $30/bbl mark. Nevertheless, volatility is expected

Norway will be Lithuania's 2016 Top Gas Supplier

Lithuania will import more gas from Norway than from former sole supplier Russia in 2016 after developing infrastructure to support liquefied natural gas (LNG) imports,

Insurance

Three Dead on Pemex Platform, Fire Under Control

Three workers were killed and at least seven injured when a fire broke out on a Pemex oil processing platform in the Gulf of Mexico, but the latest in a string of incidents is now under control,

Glencore to Lift Iranian Fuel Oil at Bandar Mahshahr

Anglo-Swiss commodity trader Glencore has chartered a ship to load Iranian fuel oil at the Iranian port of Bandar Mahshahr in a move that signals the return of

Norbulk Selects Parker Kittiwake’s Cat Fines Test Kit

Parker Kittiwake, a leading global supplier of asset control and protection technology, has today announced a significant order of its recently launched Cat Fines

P&I Clubs

Glencore to Lift Iranian Fuel Oil at Bandar Mahshahr

Anglo-Swiss commodity trader Glencore has chartered a ship to load Iranian fuel oil at the Iranian port of Bandar Mahshahr in a move that signals the return of

Boxship Aground Near Port of Hamburg

A Chinese container ship that is one of the world's largest has run aground on the river Elbe near Germany's largest port Hamburg but shipping to the harbour continues as normal,

Distressed Freighter Could Ground if Salvage Fails

A stricken cargo ship drifting on its side off the French Atlantic coast will run aground in southwest France if a renewed attempt to tow it to port fails on Monday, a French maritime official said.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Navigation Offshore Oil Pipelines Pod Propulsion Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1129 sec (9 req/sec)