UK War Risks Club Sets New Rates
The UK War Risks Club will return 10 percent of the net Advance Contribution paid by members for the 2008 policy year to all who renew for 2009.
The directors’ decision reflects the projected operating result for the 2008 policy year which ends on February 20th. The return will be credited against the contribution required for the next policy year.
Andrew Ward, Director of Underwriting at UK War Risks, said: "I am pleased to announce that the Club is able to make a return of call despite the challenging investment markets in 2008. The strength of our reserves and a prudent investment policy has meant that we are once again able to demonstrate the benefits of mutuality to the membership."
The worldwide trading rate for passenger and cruise ships will be 0.0363 percent. Other ships will be subject to a worldwide rate of 0.0102 per cent and a restricted trading rate of 0.0051 per cent.
For entered ships qualifying for Government reinsurance (if registered in the UK, the Isle of Man, the Channel Islands or a British colony) rates will be slightly lower. The worldwide trading rate will be 0.0327 per cent for passenger and cruise ships. For other vessels, the worldwide rate will be 0.0094 per cent and the restricted trading rate 0.0047 per cent.
However, Advance Contribution rates will be discounted by 50 per cent in respect of insurance under Rule 3 (freight, disbursements and/or increased value, premiums and/or other interests). They will also be discounted by 50 per cent for any non-cruise or passenger ship which trades exclusively for the whole policy year within one of the following restricted trading areas: USA and Canada, excluding Panama Canal transits; Australasia; and Europe, not south of Gibraltar and excluding the Mediterranean and Black Seas.
These contributions will be payable in two installments on 20 February and 20 August. The directors will keep the level of contribution under review during the Policy Year.
For the first time, brokerage commissions of 7.5 per cent will be payable on the Advance Contribution rates, less any allowances for Rule 3 or restricted trading discounts.
For ships entered directly, the same level of commission will be payable to the member. The rates listed above include brokerage/commission.
There will be a 30 per cent brokerage/commission, where Additional Premiums are placed on the Club’s main reinsurance contract, payable to broker or member.
The maximum amount for which any one ship or the interests therein may be insured by the Club will be $630m. Protection and Indemnity cover for claims, including oil pollution, will be $500m for each accident or occurrence, in addition to hull values.
Designated Additional Premium Areas are currently Djibouti, Ivory Coast, Nigeria, Somalia, Sri Lanka, Georgia, Iraq, Israel, Lebanon, Saudi Arabia and Yemen; parts of Indonesia, Malaysia, Thailand and the Philippines, including the Sulu Archipelago; and Gulf of Aden and Somalia transits. Owners of ships entering Additional Premium Areas must give the Association written notice or cover is not valid.
The UK War Risks Club, managed by Thomas Miller, has over 850 entered ships, valued at over $30b. It offers cover for hull and machinery risks, detention and diversion, war risks P&I liabilities, sue and labour expenses and discretionary cover.
In October, the Club decided to accept applications from February 20th for war risks insurance from shipowners with no connection with the United Kingdom. Until then, the Club had concentrated on UK owned and flagged vessels. The aim is to secure a broader membership base, spreading the risks more widely and achieving greater operating economies of scale.