Shipowner directors of the ‘A’ rated, 100 million GT North of England P&I club have decided on a 5% general premium increase for protection and indemnity (P&I) cover in 2010/11, reflecting the club’s continuing financial resilience.
According to chairman Albert Engelsman of Dutch shipping group Wagenborg, all North’s open policy years for P&I and freight, demurrage and defence (FD&D) classes are performing in line with expectations and no premiums in addition to the original estimated premium are expected. “It is a testament to the financial resilience of the club that during these turbulent economic conditions it has not been necessary to call on members for unbudgeted supplementary funding,” he said.
“The directors are satisfied that North remains in a sound financial position and believe its resilience during the difficult economic conditions is a testament to sound and prudent financial management. We are confident that the decisions taken with respect to the forthcoming renewal will maintain the club’s strong financial position and continue to meet its objectives of delivering financial stability, strong management and first class service to members.”
According to joint managing director Paul Jennings, the 5% increase balances the extremely difficult conditions facing all shipping markets as well as the need to protect members from the continuing random nature of large claims. “While the downturn in world trade has led to a modest fall in the number of small attritional claims, the number of larger claims is higher than anticipated – with a few unusually exceeding the club’s pool retention.”
Joint managing director Alan Wilson adds that North’s directors remain of the view that world economic conditions are extremely fragile and that the outlook for future investment is uncertain. “Accordingly our cautious investment policy, with very little exposure to equities and high risk investments, will be maintained – at least in the short term. We have nevertheless seen a positive investment return in the first 8 months of the policy year of around 3%, and free reserves remain comfortably in excess of current and anticipated regulatory and solvency requirements.”
The directors also decided to increase P&I deductible levels in 2010/11 by 10% and by a minimum of $1,000. P&I premiums will be collected in four instalments on 1 April, 1 June, 1 September and 1 December 2010. FD&D rates are to be increased by 10% with the minimum deductible increasing to $ 10,000.
North currently insures some 350 member groups from around the world, with a total P&I entry of 3750 vessels of 100 million GT (80 million GT owned and 20 million GT chartered). Around 1500 ships are also entered for FD&D cover with the club’s large and experienced defence team. The club is based in Newcastle-upon-Tyne, UK with regional offices in Hong Kong, Piraeus and Singapore.