The American Club sets the bar for 2013/4…

P and I Clubs — By on November 21, 2012 at 5:19 PM
  • AMERICAN CLUB’s 10% GENERAL INCREASE FOR 2013
  • Directors review club’s steady progress and good results
  • Growing concern over rising Pool claims
  • Balanced view of the business landscape ahead

NEW YORK, NOVEMBER 21, 2012: The American Club has set the bar for 2013/14 renewals at a 10% general increase in all classes of premium (mutual and fixed-premium) for both P&I and FD&D to take effect on February 20 next.

This was the decision of the directors when they met in New York to review the club’s performance and future prospects. In particular they looked at the near and longer-term implications of the current economic climate, emerging trends within the P&I environment and the continuing extremely difficult trading conditions for shipowners and charterers.

The club continues to make steady progress in achieving its targets. Although premium rates per ton have experienced some reductions during the past 12 months due to the ‘churn’ effect of older, higher-rated vessels being replaced by newer, lower-rated ships, entered tonnage has remained stable, and the level of the club’s retained claims has developed satisfactorily.

Investments have done comparatively well this year, and at mid-November the portfolio had earned a year-to-date return of 6.1%, adding strength to the overall performance of the club. Given these trends, the club was able to grow both its GAAP and statutory surpluses during the year. The latter surplus grew by approximately $4.7m during the nine months to September 30 last (to $69.7m), while the GAAP surplus rose by just under $1m (to $61.2m) during the same period.

In a circular issued to members yesterday, the club commented on the development of closed and open policy years. Development of closed years continues as expected, with a healthy excess of assets over liabilities; the contingency fund totalled approximately $60m at September 30, an increase of some 10% over the position 12 months earlier.

For open years the release call for 2010 has been reduced from 25% to 5%; for 2011 it is reduced from 25% to 15%; and for 2012 it will remain at 20%.

Joe Hughes, chairman and ceo of Shipowners Claims Bureau Inc., the managers, said that after their review the directors concluded that, while the 2011 and 2012 results continue broadly to exhibit the more benign trends for retained claims which featured so strongly in 2010, they have nonetheless been affected by a continuing lack of pricing power and rising external costs, notably that of pooling. Further, longer-term trends suggest that some allowance must be made for mounting exposures over the year ahead, particularly those driven by claims inflation.

Mr Hughes said that pool claims remain a source of concern, as they do for all other mutual clubs in the International Group, with claims levels for both 2011 and 2012 to date being among the highest ever experienced.

He concluded: “The directors’ decision regarding premium rating for 2013 was intended to reflect a balanced view of the business landscape which lies ahead. The club’s board is aware that price increases are never welcome, particularly at a time when the freight markets are in such a parlous condition. Nevertheless, it remains resolute in its commitment to maintain – and indeed enhance – the club’s financial standing over the years ahead, particularly in light of the excellent progress it has made in the recent past.”

During December, the club’s managers will be giving presentations to the Greek and London markets.  

www.american-club.com

The American Club was founded in February 1917. In addition to its US headquarters in New York, the club is able to provide local service across all time zones, communicating in 11 languages, with subsidiary offices in London, Piraeus and Shanghai and a worldwide network of correspondents.

Leave a Reply

IMPORTANT! To be able to proceed, you need to solve the following simple math (so we know that you are a human) :-)

What is 6 + 14 ?
Please leave these two fields as-is:

Trackbacks

Leave a Trackback