London Club Completes Financial Year

Thursday, July 11, 2002
The London P&I Club completed its 2001/2002 financial year in a healthy position, with free reserves of more than $80m. In levying its supplementary call for the year in line with original estimates, the Club has also maintained the stability of its supplementary calls for ten successive years. The year was a difficult one for marine mutual liability underwriters. P&I premiums, however, hardened in the wake of the marked increase in earlier years' claims and a deterioration in the performance of investment markets. In its Annual Review for 2002, the London Club confirms that it achieved its general premium increase target of 27.5 per cent across its entire membership. And it pays tribute to its membership by pointing out that, at year-end, the premiums reported due from them were below $500,000 - even less than the previous year when the debtors/premium ratio was already the lowest of any International Group club. The Club, pointing out that "this is a useful measure of the quality of membership", notes that, alone among clubs, virtually the whole of its premium is collected by year-end. During the course of the policy year, a total of 91 vessels, aggregating more than 4m gross tons, was entered into the Club for P&I risks. Of these, 48 were newbuildings. This serves to improve even further the Club's impressive fleet age profile, in which more than forty per cent of entered vessels are shown to be less than ten years old. The Club has the largest average ship size in the International Group. After the sale or disposal by members of mostly older and non-viable tonnage, the Club's total entered tonnage for the year across all classes of business was largely unchanged from the previous year at 31.5m gt. Following the unusually high level of claims experienced in the 2000/2001 policy year, 2001/02 reverted to a more moderate level. In line with its customary practice, the Club has adopted a very conservative reserve for "incurred but not reported" (IBNR) claims in 2001/02, but the current level of paid and outstanding claims for the year is running at a level some twenty per cent less than for the previous year. Commenting on the pressures facing the P&I industry in the past two years, John M Lyras, Chairman of the London Club, writes in the Annual Review, "The outstanding investment returns and low claims experienced in the 1990s strengthened the Club sufficiently to withstand the strain, and the free reserves remain substantial." Paul Hinton, Chief Executive of A Bilbrough & Co, managers of the London Club, concludes, "For the first time in living memory, the Club is having to increase premiums largely because of depressed investment returns. Likewise, this is the first occasion in recent history that our members are having to find the funds to pay sharply increasing premiums at a time when freight rates are low, so their resources are already stretched. It is in the discussion and resolution of such issues that the value of leadership of the Club's shipowner Committee in the decision-making process again becomes apparent. Their insight into our members' circumstances and into how they might react to the different possible courses of action represents a valuable mechanism by which our system of mutuality is regulated." "Regulatory requirements are causing clubs to review the constitution of their boards and committees. But it is noticeable that there is no sign of any appetite for more than the most minor change. That presumably represents an implicit consensus as to the value of such overwhelming shipowner representation and a commitment to maintain what is a quintessential part of the traditional club structure."
Maritime Reporter April 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Marine Electronics

Furuno Debuts Updated Echo Sounder

Furuno has introduced a new IMO Echo Sounder, FE800, offering an 8.4-inch Color LCD display with built-in dual-frequency capability. It also features a new system

Alewijnse Success at Damen Shiprepair Dunkerque

Electrical system integrator Alewijnse Marine Systems is celebrating the first anniversary of delivering electrical services and maintenance to vessels at Damen Shiprepair Dunkerque.

KVM for Ships, Harbors and Offshore

With the increasing application of IT installations in maritime environments, the requirements for optimized operation increase as well. KVM technology said it

Finance

Hoegh LNG's Bond Issue

Hoegh LNG (HLNG) has successfully completed the issuance of a USD 130 million senior unsecured bond in the Nordic bond market with maturity date expected to be 5 June 2020.

NordLB Back to Profit

Although the crisis is not over in all segments, Germany's second-largest marine lender, Nord LB, said its shipping loan portfolio turned a corner in the first

Navios to Expand Fleet with Two VLCCs

Monaco-based tanker owner and operator Navios Maritime Midstream Partners (NAP) plans to launch syndication of a USD 205 million Term Loan B to finance the purchase

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Navigation Pipelines Pod Propulsion Port Authority 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: 0.1157 sec (9 req/sec)