Shipowners were warned in Greece on December 15 that the increasing financial transparency of P&I clubs was no guarantee of their future financial performance. The warning from the 45 million GT North of England P&I club was given at the Piraeus Marine Club
's prestigious annual P&I seminar.
North of England director Mike Salthouse
, formerly head of the club's Piraeus office, told delegates: 'It has never been easier to monitor a P&I club's financial performance. But how it will perform in the future is something that no amount of disclosure can reveal.'
He said sophisticated regulatory controls, the International Group's comprehensive disclosure requirements and the constant probing by ratings agencies and brokers meant it was very difficult for a P&I club to mislead its members or the industry, either inadvertently or intentionally.
'There are nevertheless traps for the unwary,' he said. 'A club's true financial position may be complicated by lack of common accounting standards, different disclosure regulations in different jurisdictions, combining P&I results with other types of insurance, disparate modelling of future claims liabilities and one-off events in a particular policy year.'
'Given these variables, my advice to shipowners is to select a club with good historic performance, get to know the managers, ask them questions and satisfy yourselves that they are sufficiently competent and professional to be entrusted with your money,' said Salthouse.
Responding to recent comments concerning a discretionary award to its current chairman in 2002, Salthouse said: 'It would be improper to discuss any member's claim with third parties but I can say that, contrary to current speculation, the claim in question was not founded on delivery of cargo without production of bills of lading. The member was not chairman at the time but, as a director, was automatically excluded from any discussion or involvement in the shipowner board's decision-making process.'
'We nevertheless welcome the establishment of a Group working party on discretionary claims as it sends out a further positive signal that the P&I industry is continuing to work collectively and in the interests of all shipowners,' he said.
Salthouse was speaking to around 100 senior members of the Greek shipping community including shipowners, ship managers and brokers as well as most of the major clubs. The North of England now insures a fleet 2600 ships entered by 400 members from throughout the world. It remains the only P&I club - and one of few European insurers - to have been given a 'positive outlook' in 2003 from leading rating agency Standard and Poor's.