The London P&I Club completed its 2002/2003 financial year in a healthy
position. Free reserves increased to USD82.7m.
In its Annual Report for 2003, The London Club confirms that the 25%
increase in advance call rates achieved for 2003 has been designed to
maintain its record of consistent Supplementary Calls, which have been
stable for over a decade, despite the challenging conditions for the P&I
industry in recent years.
The London Club has made reference to the quality and strength of its
Membership which once again showed itself in the low level of outstanding
calls and premiums due from Members at the year-end. The Club consistently
has the lowest year-end debtors in the International Group.
The Club has seen a downturn in claims for the 2002 policy year. At 20
February 2003, claims for the 2002 policy year were 10% lower than the 2001
year and 30% lower than the 2000 year.
During the course of the policy year, a total of 121 vessels, aggregating
more than 4m gross tons, was entered into the Club for P&I risks. Of the
ships attaching, 24 were new buildings and they were instrumental in
reducing the average age of all the entries to 15 years. 40% of vessels
entered in the Club are under 10 years of age, continuing to improve the age
profile. The Club's total tonnage is about 30m gross tons.
Although the world economy was beset by falling stock markets, fears of
another Gulf War, and doubts generally about growth prospects, shipowners
remained relatively confident and new building orders continued to be
placed. 43 new buildings are entered for FD&D risks with a tonnage in
excess of 2m gt. The London Club maintains
the largest average ship size
which, at the year end, was over 34,000 gt. The type and geographical
spread of vessels has remained largely unchanged with tankers, bulk carriers
and container vessels representing nearly 93% of the tonnage.
Commenting on the Club's increase in reserves, John M Lyras, Chairman of The
London Club, writes in the Annual Review, "This early and positive
turnaround has come about for two main reasons: Firstly the firm action
taken by the Committee to correct premium rates, which for some years had
been set at low levels, accounting for expected investment income and
secondly, because despite the Club suffering a major pollution claim,
resulting from the loss of the Prestige off Spain towards the end of the
year and the substantial spillage of her cargo, the overall claims
experience has been benign."
This all bodes well for the future of The London Club.