Continuing Demand for Strike Club Covers Marine Supply Chains

MarineLink.com
Monday, July 29, 2013

The Strike Club, an insurer of shipowners and charterers seeking insurance protection against delays in the marine trades, is experiencing a stronger uptake of its covers, whether for mutual entries or for the fixed-premium covers for war risks, loss of earnings (LoE) and bespoke delay risks. LoE business is particularly strong, and the club now offers an increased limit of $4 million each incident (up from $3.375 million).

The club, now in its 56th year of trading, has an S&P rating of BBB+ with stable outlook. This was reconfirmed by the rating agency after it announced new criteria for the rating of insurance companies, including 14 marine mutual insurers.

The agency said the stable outlook reflected its view that the club’s risk-based capital adequacy is resilient at extremely strong levels, and that it will maintain its market leadership in the niche area of strike and delay insurance.

When the club’s annual general meetings were held in Stockholm, the managers were able to report that the aggregate mutual total tonnage entered during the 2012/13 year had grown to 170m dwt, against the previous year’s total of 145m dwt. Europe continues to represent the largest proportion of the club’s premium at 37%, although Asian take-up continues to show promising year-on-year growth.

“The current policy year, that commenced on February 1, 2013, has potential for further growth,” said Bill Milligan, chief executive of S.C. Management, speaking in Monaco, where the administrative office is located. “The Strike Club has made significant progress over the past two to three years, as ship operators have sought financial protection to fall back on when unexpected delays pile up, an unhappy feature of this increasingly volatile and hostile environment. Political risks are becoming an increasing concern for many ship operators. The political situation in Egypt is a particular worry at the moment, with fears of possible disruption at ports and the Suez Canal.

“Economies around the world remain under pressure, to say the least, leading to widespread social unrest and harsh markets. It is little wonder that strikes and lockouts are spreading in the face of rising joblessness, poor conditions and soaring living costs,” he added.

“Looking at the wider picture, the economic downturn and inevitable cost-cutting are resulting in breakdown and disruption in marine supply chains, which are now highly complex. Despite the abysmal trading conditions for most shipowners, the P&I clubs are finding that claims are rising, not falling as might be expected, and The Strike Club is no exception in this situation.”

In Stockholm, the club’s directors noted that under Classes l and ll (shore-related risks) the 2011/12 policy year was closed in April 2013 with a call of 20%. After 15 months, claims for 2012/13 were somewhat higher than originally forecast, but nevertheless the release call was maintained at 30%. For the current year, and despite claims setbacks in the first few months, with a miners’ strike in Colombia, widespread port strikes in Chile and a prolonged port strike in Hong Kong, the release call was kept at 30%.

Under Class lll (ship-related risks), the first few months of the new policy year had seen claims in line with forecasts, and the release call was maintained at 30%, the same as for the 2012/13 year.
 

Maritime Reporter October 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

World’s Largest Boxship is DNV GL classed

CSCL Globe, the world’s largest containership and the first of a series of five 19,100 TEU containerships ordered by China Shipping Container Lines (CSCL) in 2013,

New Players in Singapore Markets in OW's Absence

The downfall of a leading marine fuel supplier that prompted sellers to tighten credit terms in Singapore is skewing the post-OW Bunker jostle for market share

Japan Military Wants China "Crisis Management" Pact

Japan's highest-ranking military officer on Friday urged an early start to a "crisis management" mechanism with China amid conflicting claims to a group of tiny East China Sea islands.

Finance

Asia VLCC Rates Could Could Climb Even More

Owners see rates climb by nearly $22,000 per day; Rates could peak as more tonnage comes free. Rates for very large crude carriers (VLCCs) on key Asian routes

New Players in Singapore Markets in OW's Absence

The downfall of a leading marine fuel supplier that prompted sellers to tighten credit terms in Singapore is skewing the post-OW Bunker jostle for market share

Asian Airlines Pause Before Hedging on Fuel

Oil fell to four-year low of $72 on Thursday; Airlines hope the price will slip below $70 a barrel. Airlines in Asia-Pacific are holding off from hedging their

Insurance

High Seas Becoming Less Secure

Despite the significant reduction in piracy attacks over the last few years it is now widely accepted by the maritime community that the safety of the High Seas

Marine Insurance & the “Human Factor”

Insurance underwriters of diversified maritime exposures see a wide variety of approaches taken by vessel operators to manage human error to control risk. They

Night Moves on America's Waterways

Overnight operations are certainly not unusual on America’s inland waterways, but that doesn’t make them any less hazardous. Onboard activities that seem so straightforward

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Repair Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | terms and conditions | 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: 0.2774 sec (4 req/sec)