View this article online: https://www.insurancejournal.com/news/international/2011/11/03/222650.htm
The Directors of the London-based Steamship Mutual P&I Club “recently reviewed the Club’s open policy years, as well as claims in earlier years, and considered the premium ratings required for the 2012 policy year,” said an announcement from the Club.
The Board noted that “back year claims (those in the policy years up to 2009/10) had increased above projections during the early part of 2011, although over more recent months there has been some improvement in prior year claims compared to projections. For 2010/11, claims are developing satisfactorily, at lower levels than projected for the year.”
However, the bulletin also stated that so far this year “claims (notably crew) are higher in both number and amount than those reported at the same point last year, with more high value (excess of US$1 million) claims for Cargo, Fixed and Floating Objects and on charterers’ covers.”
As a result Steamship’s board concluded that these developments “appear to reflect a degree of upward pressure upon claims which, it seems, has not yet been reversed by slowing global growth. Despite turbulent financial markets, the combined portfolio of the Club and Trust has maintained an overall return of 2.2 percent to date.
“Against this background the Board decided to increase premium ratings by 5 percent across all areas of the Club’s business, and to increase deductibles to a minimum of US$5,000 and by US$1,000 for deductibles below US$25,000. Release calls have been reduced for the 2009 and 2010 policy years, to 5 percent and 15 percent respectively, and for the 2011 and 2012 policy years set at 20 percent.”
CEO Gary Rynsard commented: “The Board was naturally sensitive to the extremely difficult conditions in the freight market. Although claims in the current year are not a cause for concern there are signs of claims inflation, in particular crew claims. This allied to the effects of the replacement of older higher rated tonnage with new lower rated tonnage means that premiums must be increased. The Board decided that a 5 percent increase in premiums over all covers and a modest increase in deductibles was the appropriate response to ensure the continued financial strength of the Club.”
Source: Steamship Mutual