International Insurance and Reinsurance Brokers The P&I ... · PDF fileThe P&I Report 2017...

International Insurance and Reinsurance Brokers

The P&I Report 2017

The P&I Report 2017

Contents

P&I Market Share

13

motoring ahead

8-9

General Increases

16

Freight, Demurrage and Defence Summary

18-19

Current International Group issues

22-23

About Us 4-5

P&I Team Contacts 6-7

Motoring Ahead 8-9

International Group 2017 10-12

Summary of 2016/17 Results 13

P&I Market Share 14

Standard & Poor’s Ratings of P&I Clubs 15

Average Expense Ratios (AER) 16

General Increases 17

Supplementary Call Record 18

Freight, Demurrage and Defence Summary 19

Pooling and Reinsurance 20

Excess of Loss Reinsurance Rates 21

Estimated cost of notified Pool claims 21

Current International Group issues 22-23

P&I Club Information 24-25

■ American Steamship Owners Mutual Protection & Indemnity Association, Inc. 26

■ The Britannia Steam Ship Insurance Association Ltd 27 ■ Gard P&I (Bermuda) Ltd 28 ■ The Japan Ship Owners’ Mutual Protection

& Indemnity Association 29 ■ London Steamship Owners Mutual

Insurance Association Ltd 30 ■ The North of England P&I Association Ltd 31 ■ The Shipowners Mutual Protection

& Indemnity Association (Luxembourg) 32 ■ Assuranceforeningen Skuld 33 ■ The Standard Club Ltd 34 ■ Steamship Mutual Underwriting Association Limited 35 ■ The Swedish Club 36 ■ The United Kingdom Mutual Steam Ship

Assurance Association (Bermuda) Ltd 37 ■ The West of England Shipowners Mutual

Insurance Association (Luxembourg) 38

3

4

About UsFounded in 1820, Tysers is a leading independent

international Lloyd’s broker that is based at the heart

of the world’s premier insurance market in London.

Tysers employs some 260 people; handles over

$850 million of annual premiums and works with

leading insurance markets worldwide to deliver risk

solutions to a global client base. All our services –

management, broking, claims, technical, accounts

and documentation – are based on the same floor

in the Beaufort House office, ensuring a seamless,

professional service backed by expertise across a wide

range of specialist insurance classes.

Not surprisingly for a company that started life nearly

two centuries ago and spawned a shipping line,

Tysers’ Marine division is one of the oldest and most

highly respected in the London market. All our people

are client focused and combine to provide a fully

integrated broking, administration and claims service.

The P&I Report 2017

■ Protection and Indemnity,

FDD, other Marine Liabilities

including Contractual and

Specialist Operations

■ Charterers’ Covers

■ Containers and Chassis

■ Ship Agents’ Liabilities

■ Ports and Terminals

■ Loss of Hire/ Trade Disruption

■ Hull & Machinery

■ War Risks

■ Piracy

■ Kidnap and Ransom

■ Reinsurance

■ Builders Risks – including

Related Delay Covers and

Contract Repudiation

■ Mortgagees Interest

Global expertise With particular strength in the

UK, Europe, Indian sub-continent,

South East Asia, the Far East and

South America.

Established market presence Strong relationships with Market

and P&I underwriters facilitate

competitive pricing. We work with

all 13 Clubs in the International

Group.

Extensive experience Our team has a unique blend

of expertise to put at clients’

disposal, having worked

previously for International Group

P&I Clubs, leading insurers and

other major brokers.

Reinsurance expertise Our reinsurance clients range from

the London Market to other major

marine underwriting centres,

P&I Clubs, fixed premium and

overseas insurers.

Proactive claims service Our integrated claims team is

involved in all accounts from day

one, before any loss occurrence.

The broking and claims teams

work in harmony to deliver a

complete service.

Areas of Expertise

Key Strengths

5

6

Martin HubbardEmail: [email protected]

Direct line: +44 (0)20 3037 8309

Mobile: +44 (0)7971 501747

Over 40 years P&I experience, mainly as a Senior

Underwriter and Director with the Steamship Mutual

Underwriting Association Ltd. Joined Tysers in 2005.

Simon SmartEmail: [email protected]

Direct line: +44 (0)20 3037 8303

Mobile: +44 (0)7801 553866

Simon joined Tysers in 2012 having previously worked with

Marsh and JLT and brings almost 25 year experience in P&I.

Ian HarrisEmail: [email protected]

Direct line: +44 (0)20 3037 8301

Mobile: +44 (0)7881 265060

Ian joined Tysers from Willis in January 2014, and has over

40 years P&I and H&M experience, including ten years in

claims.

Piers O’HegartyEmail: [email protected]

Direct line: +44 (0)20 3037 8315

Mobile: +44 (0)7971 501742

Joined the Marine Division in 1999 having previously been with

Sedgwicks and Aon.

P&I Team Contacts

The P&I Report 2017

Chris SydenhamEmail: [email protected]

Direct line: +44 (0)20 3037 8340

Mobile: +44 (0)7971 501772

Claims Director, responsible for all Marine claims.

Over 30 years with Tysers.

Julien HubbardEmail: [email protected]

Direct line: +44 (0)20 3037 8308

Mobile: +44 (0)7971 501770

A marine broker since 1990.

Joined Tysers in 2004 from Miller Marine.

Jason CrowhurstEmail: [email protected]

Direct line: +44(0)20 3037 8357

Mobile: +44(0)7824 463735

Marine Claims Manager. Joined Tysers in 2011.

Tom WalkerEmail: [email protected]

Direct line: +44 (0)20 3037 8329

Mobile: +44(0)7971 501762

Marine Director – at Tysers for 10 years.

7

8

2016/17 was yet another wonderful

year for the International Group, with

total free reserves racing well over

$5 billion thanks to continuing low

levels of claims and better investment

returns, the latter adding $368 million

to the coffers following a loss of

$168 million in the previous year. The

average combined ratio rose from

91.36% to 94.39%, but this was due to

a large extent to a higher level of return

premiums or dividends.

As we predicted, the 2017 renewal

was the softest on record. Increases

were as rare as a Bugatti Royale 41, “as

expiry” was the norm for an adverse

record, and shipowners with good

records secured reductions at levels

we have probably never seen before.

Underwriters who sought “as expiry”

on the basis members would benefit

from reduced final calls and lower

reinsurance costs were given very short

shrift by brokers and forced to sharpen

their pencils.

There will be more good news during

2017 as Clubs continue to return

premium on past years. Some have

been rather miserly so far with returns

which can at best be described as

“symbolic”. We love the Gard for simply

cancelling the full 25% deferred call on

2016. We like Steamship for their 10%

return on 2014 and another expected

worthwhile return later this year, and

Britannia for being different by, in

addition to an improvement in calls for

earlier years, paying current members a

dividend of $20 million. We are slightly

bemused by Swedish Club giving a

4% return on the unfinished 2017 year

– this may be simpler for members’

accounting purposes but could produce

some interesting discussions under

the International Group Agreement as

to what constitutes quoted premium –

100% or 96%? We hope for increased

generosity from the majority of Clubs

later this year, and will also ensure

that for renewal purposes, loss ratios

are based on 100% premiums and not

premiums net of returns.

In the soft market, there is even less

movement of tonnage between Clubs

than usual but for owners who may

wish to shop around, current Release

Calls are set out on Page 9.

motoring aheadInternational Group Free Reserves rise by over $400m to $5.3 billion

Year Owned GT Free Reserves (US$) Reserves per GT

2012/13 1,036,000,000 4,086,000,000 $3.94

2013/14 1,076,000,000 4,318,000,000 $4.01

2014/15 1,104,000,000 4,623,000,000 $4.19

2015/16 1,154,000,000 4,826,000,000 $4.18

2016/17 1,204,000,000 5,303,000,000 $4.40

The P&I Report 2017

Although some Clubs have seen an

increase in claims’ activity during 2017,

this has been offset by solid investment

returns. The 2018 renewal should

therefore be more of the same, with

no general increases and shipowners

expecting further improvements to

reflect good records and the Clubs’

embarrassment of riches. It is fair to say

that rates for new buildings over recent

years are already very competitive but

many older vessels are still paying far

too much, based on historical claim

levels rather than the benign claims’

climate of the last four years. The Clubs

must recognize that loyal members

with vessels entered for many years

deserve special consideration to reflect

current market conditions.

The International Group’s Excess Loss

Reinsurance contract is running very

well, with no major claims in recent

years. While we hope for and the

results would justify further reductions

in the International Group’s reinsurance

costs, we shall have to see the impact

the recent hurricane activity in the

United States and the Caribbean,

the worst since 2005, will have on

reinsurance pricing generally. We

shall report further on this in our usual

Update in December.

What else are the Clubs doing with

their money? Some continue to invest

in diversification, while others are

strengthening overseas offices or

opening new ones. UK - based Clubs

also need to look at a suitable location

for a European office post-Brexit.

Others may just be buying fast cars,

which is why we have a new theme this

year grading Clubs according to the car

manufacturer we feel most suits their

style and performance.

Please note all cars will perform

better with Tysers’ service plan.

Release Calls as at September 2017

As we predicted, the 2017 renewal was the softest on record. Increases were as rare as a BUGATTI ROYALE 41, “as expiry” was the norm for an adverse record.

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2015 10 3.4 5 3.6 12.5 0 0 3 0 0 5 0 0

2016 20 5.2 15 3.6 15 5 0 7.5 0 2.5 10 10 7.4

2017 20 10.3 20 3.6 15 15 0 15 6 12.5 15 15 14.8

Britannia, Japan and West report their Release Calls as a percentage of Advance Call. In order to be consistent with other Clubs, all our figures are expressed as a percentage of estimated total premium.

9

10

International GroupGard P&I (Bermuda) Limited There is no doubting Gard merits pole position as the Ferrari of P&I, accelerating way ahead of the rest.

The Britannia Steam Ship Insurance Association Limited Very British, conservative, reliable and not now averse to occasional innovation.

The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited Traditional, but can be a bit expensive. Much more reliable these days.

Assuranceforeningen Skuld Much improved all rounder and very safe.

Steamship Mutual Underwriting Association Limited The rich kid on the block, very fast acceleration and moving through the field.

The P&I Report 2017

The Standard Club Well liked but new models not always reliable.

The North of England P&I Association Limited Older models proving expensive to maintain and should be pensioned off.

The West of England Shipowners Mutual Insurance Association (Luxembourg) Good quality but still looks a bit dated and could do with a facelift.

The Shipowners Mutual Protection & Indemnity Insurance Association (Luxembourg) Still the best for small ones.

11

12

London Steamship Owners Mutual Insurance Association Ltd A steady ride, but not very exciting and needs a new model.

The Japan Ship Owners’ Mutual Protection & Indemnity Association Very quiet and popular in the local market.

The American Club Small but nimble, and an improving image.

The Swedish Club Reliable performer but needs a bigger version.

The P&I Report 2017

Summary of 2016/17 ResultsClub U/W

Profit/Loss 2016/17 ($M)

Net Combined Ratio 2016/17

Investment Income 2016/17 ($M)

Surplus Feb 2017 ($M)

Free Reserves Feb 2017 ($M)

Total Owned GT Feb 2017 (M)

Free Reserves Per Owned GT Feb 2017

American (13) 114% 8 (5) 51 16 $3.32

Britannia* 5 75.40% 43 33 601 101 $5.96

Gard** 31 95% 104 125 1,135 217 $5.24

Japan 24 84.40% 5 17 208 92 $2.28

London 2 97.95% 26 28 188 44 $4.34

North 11 96% 21 2 431 140 $3.08

Shipowners 3 98.6% 12 15 294 25 $11.56

Skuld 9 98% 37 46 394 91 $4.34

Standard 18 95% 23 40 431 126 $3.42

Steamship 42 83.5% 28 70 510 85 $6.03

Swedish 2 98% 10 12 195 47 $4.16

UK (30) 104% 44*** 14 558 139 $4.01

West 23 87.2% 7 30 307 83 $3.72

Total 127

Average 94.39%

Total 368

Total 427

Total 5,303

Total 1,204

Average $4.40

Figures in orange are consolidated figures covering all lines of business rather than P&I alone.

* Includes Boudicca ** GARD Net Combined Ratio and Surplus are net of $90m return on 2016 deferred call. On ETC basis the NCR is 83% and the surplus $215m.

*** UK investment income is net of $7.5m interest paid on perpetual subordinated securities.

13

14

P&I Market Share

P&I Club Owned GT % Accounting Year Premium $

% Free Reserves $

%

Gard 216,600,000 18.0 767,364,000* 20.0 1,134,862,000 21.4

North of England 140,000,000 11.6 428,348,000 11.2 430,755,000 8.1

UK 139,000,000 11.5 376,170,000 9.8 557,800,000 10.5

Standard 126,000,000 10.5 338,800,000 8.8 430,500,000 8.1

Britannia 100,900,000 8.4 225,854,000 5.9 601,042,000 11.3

Japan 91,500,000 7.6 221,126,000 5.8 208,423,000 3.9

Skuld 90,800,000 7.5 403,235,000 10.5 394,075,000 7.4

Steamship 84,600,000 7.0 305,642,000 8.0 510,290,000 9.6

West of England 82,500,000 6.9 221,849,000 5.8 306,512,000 5.8

Swedish 46,810,000 3.9 104,113,000 2.7 194,880,000 3.7

London 43,900,000 3.6 102,891,000 2.7 188,012,000 3.5

Shipowners 25,441,000 2.1 228,580,000 6.0 294,041,000 5.5

American 15,500,000 1.3 109,493,000 2.9 51,418,000 1.0

Total 1,203,551,000 3,833,455,000 5,302,610,000

These comparisons show the relative size of P&I Clubs by owned gross tonnage, financial year income and free reserves as at 20 February 2017.

*All lines of business. P&I income $531,474,000 net of waived deferred call.

The P&I Report 2017

Standard & Poor’s Ratings of P&I ClubsInsurance Year 2013 2014 2015 2016 2017

Gard A+ A+ A+ A+ A+

Britannia A A A A A

North of England A A A A A

Standard A A A A A

Skuld A A A A A

UK Club A- A A A A

Steamship A- A- A- A A

Shipowners A- A- A- A- A

West of England BBB BBB BBB+ BBB+ A-

Swedish Club BBB+ BBB+ BBB+ BBB+ BBB+

Japan Club BBB+ BBB+ BBB+ BBB+ BBB+

London Club BBB BBB BBB BBB BBB

American Club BB- BBB- BBB- BBB- BBB-

15

16

Average Expense Ratios (AER)The AER was introduced in 1998 as a means of comparing the administration costs of the mutual P&I Associations under the terms of their exemption from the E.U. Competition Directive. The Clubs are only obliged to report their five-year AER and most do not show their annual expense ratio. The below figures are all five-year averages.

2013 2014 2015 2016 2017

American Club 19.30% 19.30% 21.60% 24.20% 25.70%

Shipowners 20.00% 18.00% 20.00% 21.00% 22.00%

West of England 15.43% 14.24% 14.86% 15.50% 15.15%

Swedish 13.30% 12.10% 13.00% 13.30% 13.30%

Skuld 12.30% 12.30% 12.90% 12.80% 12.80%

Standard 13.20% 10.90% 11.40% 12.20% 12.40%

Steamship 12.40% 11.30% 11.80% 12.10% 12.10%

Gard 14.10% 11.30% 11.40% 11.83% 12.02%

North of England 13.10% 12.50% 12.40% 12.40% 12.00%

UK Club 9.47% 9.35% 9.66% 10.17% 10.22%

London Club 9.63% 8.36% 8.78% 9.52% 9.51%

Britannia 8.49% 8.03% 8.43% 9.12% 9.42%

Japan Club 5.69% 5.73% 5.25% 5.18% 5.46%

Average 12.80% 11.80% 12.42% 13.02% 13.24%

The P&I Report 2017

* Applies to premium net of Group Excess Loss Reinsurance costs

+ Estimated

^ Includes any increase in Group Excess Loss Reinsurance costs

General IncreasesSh

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2010 5 0 5 5 2.5 5 4 5 3 5 5 12.5 5

2011 0 0 0 0 2.5 5 2 5 3.5 5 3 10 5

2012 0 5 0 5 5 5 5 5 5 3 5 3 5

2013 5^ 5 8.5 7.5 7.5 7.5 10 16.5 7.5 7.5 15 5 12.5

2014 5^ 5 8.5+ 10 7.5 7.5 10 2.5 12.5 10 7.5 7.5 10

2015 0^ 2.5 0 0 2.5 2.5 4.5 2.5 5 6.5 4.75 3 6

2016 0 2.5 0 0 0 0 2.5 2.5 2.5 2.5 2.5 3 5

2017 0 0 0 0 0 0 0 0 0 0 0 0 0

Total 2010/2017 116 122 124 130 131 137* 144 145 146 147 151 153 159

Average 139

The total shows the cumulative increase based on 2009 premium of 100.

17

18

Supplementary Call Record

Called above Estimated Total Call Called below Estimated Total Call Called full Estimated Total Call

(Original Estimate/Current Estimate)

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2010 25/25 40/40 25/15 40/50 0/0 0/0 10/10 0/0 0/0 0/0 0/0 0/0 30/30

2011 25/25 40/40 25/20 40/40 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/-2.50 30/30

2012 0/0 40/40 25/15 40/40 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 30/30

2013 0/0 45/45 25/15 40/40 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 35/35

2014 0/0 45/35 25/15 40/20 0/0 0/0 0/0 0/0 0/0 0/-10 0/0 0/-2.50 35/35

2015 0/0 45/40 25/15 40/30 0/0 0/0 0/0 0/-2.50 0/0 0/0 0/0 0/-3 35/35

2016 0/0 45/45 25/0 40/40 0/0 0/-5 0/0 0/0 0/-5 0/0 0/0 0/0 35/35

2017 0/0 45/45 25/25 40/40 0/0 0/0 0/0 0/0 0/0 0/0 0/-4 0/0 35/35

The P&I Report 2017

Freight, Demurrage and Defence SummaryGeneral Increases

2017 Limits and Deductibles

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2013 10 10 5 0 12.5 10 5 0 15 7.5 5 7.5 9

2014 10 0 10 7.5 10 5 5 0 12.5 10 7.5 5 7.5

2015 4.5 0 10 0 6 2.5 0 0 5 0 5 0 0

2016 0 0 2.5 0 5 2.5 0 0 0 0 0 0 0

2017 0 0 0 0 0 0 0 0 0 0 0 0 0

Club Standard Limit Standard Deductible

American $2,000,000 $5,000, then 25% maximum $50,000

Britannia $10,000,000 (but $2m newbuilding/conversion disputes) One-third of all costs excess of $5,000

Gard $10,000,000 (but $2m newbuilding/conversion disputes) 25%, minimum $5,000

Japan Yen 1.5 billion (approx. $12,000,000) One-third of all costs excess of $1,000

London $7,500,000 25% all costs

North None (but $250,000 building, purchase, sale disputes) 25%, minimum $10,000 maximum $150,000

Shipowners $5,000,000 First $750 of costs up to $3,000, then 25% maximum $30,000

Skuld $5,000,000 (but $300,000 building, purchase, sale disputes) 25%, minimum $10,000

Standard $5,000,000 25%, minimum $10,000

Steamship $10,000,000 $5,000, then one third all costs subject overall maximum $30,000.

Swedish $5,000,000 $12,000, plus 25% of any costs in excess of $250,000

UK $15,000,000 Nil, but no cover for disputes under $10,000

West $10,000,000 $5,000, then 25% maximum $50,000 but $100,000 for building disputes.

19

20

Upper Pool Layer – Reinsured by Hydra

Co-ins Layer – Reinsured by Hydra

Lower Pool Layer – Reinsured by Hydra

Lower Pool Layer

Individual Club Retention (ICR)

3.1bn

Oil Pollution

P&I

Single per vessel retention

Owned Entries

Collective OverspillExcess of Underlying

Third LayerExcess of Underlying

Second LayerMarket Share 85%

First LayerMarket Share 55%

Second LayerMarket Share 85%

2.1bn

1.1bn

600m

100m80m

45m

30m

10m

1.0bn

7.5%ICR

Priv

ate

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Pr

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%

Priv

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Priv

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Pr

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%

Priv

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First Layer Co-ins Share30%

Reinsured by Hydra

First LayerMarket Share 55%

First Layer Co-ins Share30%

Reinsured by Hydra

Layers of International Group Excess Loss Programme 2017/18

2016 – 18 Multi–Year Private Placement



Pooling and Reinsurance

The P&I Report 2017

Dirty Tanker

Clean Tanker

Dry Cargo

Passenger

YEAR

RATE

US

$ G

T

Year 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Tankers (Dirty) 0.6797 0.7300 0.8079 0.7554 0.7038 0.6515 0.7565 0.7963 0.7317 0.6567 0.5955

Tankers (Clean) 0.3187 0.3498 0.3667 0.3335 0.3055 0.2798 0.3245 0.3415 0.3138 0.2816 0.2675

Dry Cargo 0.2837 0.3196 0.3695 0.3867 0.3709 0.3561 0.4942 0.5203 0.4888 0.4537 0.4114

Passengers 1.3714 1.4985 1.6026 1.5654 1.4780 1.3992 3.1493 3.7791 3.7791 3.5073 3.3319

Estimated Cost of Notified Pool Claims

The Actual rates US$ per GT are:

Excess of Loss Reinsurance Rates

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20170.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

100

200

300

400

500

259.

9

260.

7

288.

7

446.

3

276.

6

84

364.

9

204.

5

2009 2010 2011 2012 2013 2014 2015 2016

For 2017, there was no change to the

Club retention of $10m and the Pool

limit remained at $80m. The table

show the total cost of Pool claims

based on historical thresholds.

Estimates in USD millions as at February 2017

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Brexit

The UK decision to leave the European

Union has ramifications for Clubs

regulated not only in the UK but

also the EU and EEA. While no-one,

including the UK government , has a

clue about the final terms of the deal

to be struck between the UK and the

EU, the likelihood of loss of the current

“passporting” arrangements and the

limitations of WTO cross-border trade

arrangements mean the UK-based

Clubs will need to establish new

regulated operations within the EU to

ensure they can continue to service

their EU-based members.

Cyber Risks

The exposure to cyber attacks

has become a very topical subject

following the recent worldwide Petya

Ransomware and WannaCry hacks, the

latter affecting the marine industry as

a number of Maersk terminals around

the world were affected.

It is generally felt that, in the context

of ship operation and shipboard

procedures, the risk of cyber attack

is relatively low. However, potential

scenarios include collisions resulting

from interference with navigation

systems, reefer cargo losses due to

power failures and theft of cargo by

manipulation of discharge orders.

Unlike most standard Hull policies,

there is no specific cyber exclusion

from P&I cover, although many of the

potential losses which can arise from

cyber attacks are outside the scope of

the P&I Rules. Even covered liabilities

such as those arising from collision

would not be covered if the cyber

attack was classified as an act of war

or terrorism.

At the moment, cyber risks are

generally being insured by means of

separate bespoke policies rather than

extensions to individual insurances.

The International Group is continuing

to monitor developments, both from an

operational and insurance perspective,

and is in consultation with the broader

marine insurance and reinsurance

markets.

Guidelines are available from BIMCO

and others to assist shipowners in

assessing vulnerability and protecting

against the risks of possible attacks.

MASS (Maritime Automated Surface

Shipping)

Autonomous vessels are already in

service in non-commercial sectors

and significant progress has been

made in applying the technology

to commercial shipping. It is only a

matter of time before such vessels

become a significant commercial

Current International

Group Issues 2017

The P&I Report 2017

reality, which may be very good news

for marine insurers since around

75% of marine casualties result from

human error.

Technology is advancing quickly,

but regulation moves at a much

slower pace and the legal and

regulatory issues surrounding

autonomous vessels will need to

be addressed sooner rather than

later. There is an initiative within the

IMO Maritime Safety Committee

to review the current Maritime

conventions and regulations, and to

test their applicability and fitness for

purpose going forward in the age of

autonomous vessels. The International

Group will be focusing more on the

adequacy of private contractual

arrangements- charter parties, bills of

lading, and other contracts relating to

maritime transport and operations.

Ballast Water Management Convention

The Ballast Water and Sediments

(BWM Convention) will enter into force

internationally on 8th September 2017.

There are currently 54 Contracting

States to the Convention representing

approximately 53% of the world’s

ocean going tonnage. Under the

terms of the Convention, ships will

be required to manage their ballast

water to remove, render harmless,

or avoid the uptake or discharge of

aquatic organisms and pathogens

within ballast water. In addition, the

Convention will require all ships in

international trade to manage their

ballast water and sediments to certain

standards, according to a ship specific

ballast water management plan.

Neither the Convention nor the

USCG regulations on BWM will

require amendment of existing Club

Rules. Liabilities (including fines for

inadvertently introducing untreated

ballast into the environment) arising

from the escape or discharge

overboard through a “faulty” approved

system of untreated ballast or other

environmental liabilities related to

ballast are capable of cover, subject

always to the Rules and conditions of

cover. Cover for other fines relating to

a breach of BWM requirements is only

available on a discretionary basis. ■

At the moment, cyber risks are generally being insured by means of separate bespoke policies rather than extensions to individual insurances.

23

24

■ The information contained in this

report is not and is not intended to be a

definitive analysis of the Clubs’ accounts.

■ In so far as is possible we have

homogenised the data to enable

comparison.

■ Calls and Premiums are the

consolidated totals for all classes.

■ The net underwriting statistics express the

‘technical’ result for the year and exclude

any ‘non-technical’ investment income.

■ Operating Expenses include

management expenses and business

acquisition costs.

■ Solvency margins are calculated as the

ratio between total assets and gross

outstanding claims.

■ All monetary figures shown are US

dollars.

■ Whilst every effort has been made to

ensure that the information contained

in the report is accurate and up-to-date

at the time of printing, this cannot

be guaranteed by Tysers. Under

no circumstances shall Tysers be

responsible or liable for any loss or

damage caused directly or indirectly by

the publication or use of this information.

Introduction

P&I Club Information & reviews

American

26

gard

2 8north of england

31

japan

2 9

london

30

britannia

27

24

Skuld 33

Standard 34

Steamship Mutual 35

Swedish 36

UK 37

West of England 38

American 26

Britannia 27

Gard 28

Japan 29

London 30

North of England 31

Shipowners 32

uk

37

standard

3 4

shipowners

32

steamship mutual

35

skuld

33swedish

36

west of england

38

The P&I Report 2017

25

26

american steamship

48%

58%

14%

26%

2%13%

2%

37%

american steamship

48%

58%

14%

26%

2%13%

2%

37%

EuropeNorth AmericaAsiaOther

BulkersTankersGeneral Cargo / Passenger / ContainerTugs / Barges / Small craft

American Steamship Owners Mutual Protection & Indemnity Association, Inc.

Congratulations to the Club on reaching

its centenary in 2017

The Club describes 2016 as a “solid

year” but the financial results show a fair

amount of jelly wobble. An underwriting

loss of $13m was partly offset by an

investment return of 2.4% and, overall free

reserves dipped by $5m to $51m. The year

got off to a bad start with two expensive

groundings within weeks of the February

renewal, but claims did settle down and

there were only two other claims over $1m,

while attritional claims were below 2015

levels.

Expenses rose by $4m to nearly $38

million, which the Club attributes to

its investment in its new hull facility,

American Hellenic, which started

underwriting in July 2016. We are told that

many benefits have flowed to the Club

from this investment and “it has enabled

the Club to become involved in the hull

sector in a cost-effective manner which

exploits existing corporate structures and

market platforms”. The members will no

doubt be keeping a close eye on the hull

results as they seek a decent return on

their investment.

The one positive aspect for 2016 was a rise

in mutual owned tonnage of 1.4 million GT.

Otherwise, the Club prefers to emphasise

that 2017 has started well, with low claims

and improved investment returns. Let’s

hope this continues so the Club and

its members can enjoy the centenary

celebrations. ■

Gross Tonnage

Owned 15,500,000Chartered 1,100,000

Standard & Poor’s Rating

BBB–

Free reserves

2017 51,418,0002016 56,410,0002015 58,600,0002014 57,344,0002013 54,229,000

Managers

SCB Inc(Eagle Ocean Management LLC)

Year 2017 2016 2015 2014 2013

Calls/Premium 109,493 97,504 114,798 107,959 112,126

Reinsurance Cost 14,168 16,128 20,553 18,581 18,585

Net Claims (incurred) 70,761 49,364 65,962 65,064 83,265

Operating Expenses 37,744 33,978 34,795 35,250 31,995

Net Underwriting Result (13,180) (1,966) (6,512) (10.936) (21,719)

Gross Outstanding Claims 222,214 212,260 228,457 225,545 263,563

Total Assets 334,996 314,387 326,897 328,712 359,110

Average Expense Ratio 25.70% 24.20% 21.60% 19.30% 19.30%

Solvency Margin 1.51 1.48 1.43 1.46 1.36

Reserves/GT Ratio $3.32 $4.00 $4.22 $3.43 $3.61

Tonnage by Vessel

Type

Tonnage by Area

All figures $’000

The P&I Report 2017

Britannia steam ship

17%

27%

47%

17%

29%

2%5%

14%

6%

36%

Britannia steam ship

17%

27%

47%

17%

29%

2%5%

14%

6%

36%

The Britannia Steam Ship Insurance Association Limited

Bulkers/OBOTankers (Crude)ContainersTankers (Other)Cargo/Other

AsiaScandinaviaEuropeAmericasOther

Chairman Nigel Palmer reports an

excellent financial year for the Club

which has enabled it to reduce the 2014

deferred call by a further 2.5% (now

at 35%) and also reduce the 2015 call

from 45% to 40%. In addition, various

strategic initiatives prompted by reviews

undertaken in connection with the

failed merger with UK Club have been

implemented, including the expansion

of the Club’s Hong Kong office and the

acquisition of its exclusive correspondent

in Japan, Cornes P&I, now rebranded

Tindall Riley (Britannia) Japan. This all

looks very sensible, given that nearly 50%

of the Club’s tonnage is Asian.

Including Boudicca, the Club’s

dedicated reinsurer, a techncial profit of

$45m and investment income of $43m

have pushed free reserves to just over

$600m. As the Club’s mutual tonnage

reduced from 106m to 101m GT following

the insolvency of Hanjin and the loss of

another large member due to merger,

the free reserves equate to a massive

$5.96 per GT. The one downside is the

sharp reduction in chartered tonnage

from 35m to 15m GT.

Besides the reduction in deferred

calls mentioned above, the Club has

also announced a $20m “dividend” to

members with vessels on risk in May 2017.

Each member’s proportion of this dividend

is based on his 2017 premium net of the

Excess Loss reinsurance costs, and does

not relate to any specific policy year or

have any bearing on his renewal records.

Including the latest reductions in deferred

call, the total benefit to members is $31m.

On the claims front, 2016 was a very

benign year with net retained claims

at year end the lowest for 13 years. The

frequency of attritional claims (under $1m)

continues to decline and, although there

were 19 claims in excess of $1m, these

totaled only $29m with none over $3m,

compared to 2015 which suffered 20 such

claims totaling $84m.

All in all, the Club looks a very safe bet for

quality tonnage. ■

Gross Tonnage

Owned 100,900,000Chartered 15,000,000


A

Free reserves

2017 601,042,0002016 512,696,0002015 545,567,0002014 471,898,0002013 438,017,000

Managers

Tindall Riley (Britannia) Limited

Year 2017 2016 2015 2014 2013

Calls/Premium 225,854 260,722 269,726 284,167 294,057




Net Underwriting Result 45,848 (2,403) 62,831 (21,963) (69,986)

Gross Outstanding Claims 1,173,878 1,308,955 1,093,595 1,122,485 1,147,253

Total Assets 1,796,568 1,853,548 1,663,617 1,618,514 1,610,541


Solvency Margin 1.53 1.42 1.52 1.44 1.40

Reserves/GT Ratio $5.96 $4.84 $5.03 $4.37 $3.96

Tonnage by Vessel

Type

Tonnage by Area

All figures $’000Please note all figures for Brtiannia have been restated to include those of Boudicca.

27

28

AsiaNorwayEuropeGermany

GreeceAmericas

Tankers & GasBulkers/OBOContainersDry CargoPassenger/Cruise/MOU/Other

Note: items marked * are Group figures and include all business lines, not just P&I.

Gard P&I (Bermuda) Limited

Chairman Bengt Hermelin describes 2016

as an “extraordinary year”. Politically,

the election of Donald Trump and UK’s

Brexit have heightened policy uncertainty

in major economies, and growth in

protectionist measures by G20 countries is

contributing to the ongoing slowdown in

global trade. The maritime industries had

a record- breaking year for all the wrong

reasons – the Baltic Dry Index fell to an

all-time low, the Hanjin insolvency was

the first major corporate casualty in the

container trade for 30 years, the price of

oil briefly dipped below $30 a barrel and

shipyards recorded a historically low level

of newbuilds.

So what did Gard manage to achieve in

this difficult year? It actually broke a few

records in the right way. Free reserves

rose to $1,135m, enabling the Club for the

first time in recent history to waive totally

the 25% deferred call for 2016, saving the

members $90m. No fiddling around with

3% or 5% returns for the Arendal supercar,

and the Club has now returned over

$300m to members over the last decade.

Our figures below are net of the $90m

return. On a gross basis, the Club

chalked up a surplus of $215m due to an

investment return of $104m (an impressive

4.7%) and a combined ratio of 83%, made

up of 75% on P&I and 103% on Marine and

Energy. An exceptional year, and CEO Rolf

Thore Roppestad feels this has a lot to do

with members working hard to deliver first

class operations.

The Club’s strategy continues to focus on

three lines of activity; maintaining financial

strength, developing market position and

building an efficient global organization.

The Ferrari of P&I can afford to take a very

long look over its shoulder to spot the

competitors way back in the distance. ■

Gross Tonnage

Owned 216,600,000Chartered 90,000,000


A+

Free reserves

2017 1,134,862,000*2016 1,016,697,000*2015 968,590,000*2014 944,123,000*2013 894,792,000*

Managers

Lingard Limited

Year 2017 2016 2015 2014 2013

Calls/Premium 531,474 607,260 628,672 585,606 529,973

Reinsurance Cost (117,371) 137,214 132,615 141,308 124,994

Net Claims (incurred) (325,585) 351,938 421,976 444,645 422,632

Operating Expenses (52,147) 50,494 59,723 43,396 75,191

Net Underwriting Result 37,693 67,614 10,364 (43,744) (92,844)

Gross Outstanding Claims 1,445,660* 1, 572, 498* 1,379,308* 1,375,264* 1,344,151*

Total Assets 3,047,131* 3,012,936* 2,745,611* 2,731,378* 2,617,380*


Solvency Margin 2.11* 1.92* 1.99* 1.99* 1.95*

Reserves/GT Ratio $5.24* $4.72* $5.12* $5.06* $5.13*All figures $’000

Gard

25%

18%

28%

15%

20%

15%

10%

12%

5%

14%

38%

Gard

25%

18%

28%

15%

20%

15%

10%

12%

5%

14%

38%

Tonnage by Vessel

Type

Tonnage by Area

The P&I Report 2017

PanamaOthersJapanLiberia

Bulk carriersTankersCar CarriersContainer ShipsGeneral Cargo/Other

The Japan Ship Owners’ Mutual Protection & Indemnity Association

The Club has had a very satisfactory 2016,

with an excellent combined ratio of 84%

and an investment return of 2% pushing

free reserves over the $200m mark. While

this equates to just $2.28 per owned GT,

compared to the International Group

average of $4.40, the Club feels comfortable

enough to reduce the final call for 2015 from

40% to 30%, the second successive year

of reductions. Owned tonnage declined

slightly from 92.2m to 91.5m as scrapping and

sales exceeded new deliveries from existing

Members.

Director General Hiroshi Sugiura reports on

the progress made during the second year of

the Club’s three year Operational Plan “to be

a more credible Club”, to be achieved through

management strategies on “Reliability”,

“Soundness” and Competitiveness”.

“Reliability” involves enhanced loss

prevention and claims handling initiatives.

The Club has improved its PEME scheme

for Filipino seafarers, held more seminars

in Asia and increased the dissemination of

information via its website and more regular

circulars and bulletins. It also holds regular

internal study workshops and has increased

its FDD capability by the employment of an

English-qualified lawyer.

“Soundness” relates to further work on the

Club’s Enterprise Risk Management system,

first started in 2015 to monitor the balance

between risk and capital.

Sugiura feels “Competitiveness” is being

achieved through a nil general increase at

the 2017 renewal and the reduction in final

calls. He acknowledges that the P&I market

is becoming more competitive every year but

feels this will not stop the Club being the one

“most in step with Members in the future”.

Finally, the Club aims to enhance its business

activities worldwide, especially in Asia.

Recent efforts to attract non-Japanese

shipowners have met with very little success

and we do fear this is unlikely to change,

especially with other stronger and A rated

clubs increasing their presence throughout

Asia. However, the Club does deserve some

praise for probably being the only one still

performing as a true mutual. ■

Gross Tonnage

Owned 91,500,000Chartered 12,200,000


BBB+

Free reserves

2017 208,423,0002016 187,130,0002015 172,369,0002014 156,012,0002013 157,546,000

Managers

Self-Managed

Year 2017 2016 2015 2014 2013

Calls/Premium 221,126 226,280 233,096 237,738 244,631




Net Underwriting Result 23,949 16,079 716 (9,849) 1,619


Total Assets 626,834 584,276 557,348 561,647 560,360


Solvency Margin 1.71 1.57 1.61 1.43 1.52

Reserves/GT Ratio $2.28 $2.03 $1.85 $1.70 $1.71All figures $’000

Japan

20%

9%

58%

19%

6%

17%

8%4%

59%

Japan

20%

9%

58%

19%

6%

17%

8%4%

59%

Tonnage by Vessel

Type

Tonnage by Registry

29

30

London Steamship Owners Mutual Insurance Association Ltd

2016 saw a further improvement in the

Club’s finances although, in sharp contrast

to 2015, this was due almost entirely to

an excellent investment return of 8.4%

producing $26.7m (2015: loss of $11.5m)

while the underwriting surplus was down

from $15m to under $2m – a net combined

ratio of 97.9% (2015: 82.50%). As a result,

free reserves have grown from $161m to

$188m.

Chairman John Lyras reports that

2016 saw a continued benign claims

environment but then asserts that the

big contributor to the “positive operating

result” was the Club’s “controlled

adjustment to our underwriting strategy,

involving the spreading of the Member

base for our mutual P&I and other lines

of business”. We have some difficulty

finding the factual justification for this

assertion, given that almost the whole

surplus for the year came from investment

income and the underwriting result was

far worse than for 2015, but two years of

underwriting surplus, no matter how small,

is a welcome change for the Club.

Owned tonnage declined slightly to just

under 44m GT, but chartered tonnage,

which the Club is keen to develop, grew by

over 2m and is now close to 10m GT. This

includes nine new chartered entries and

the Club appears happy that these entries

have increased its presence in markets

such as Qatar, Russia and Ukraine.

Our worry is that the Club, which has

the lowest premium income in the

International Group, is desperate to grow

its market share but cannot make inroads

on mutual business against the stronger

A rated Clubs. It is thus having to focus

more on fixed premium small vessels and

chartered entries of a type and from areas

in which it has little experience and at

rates which many feel are unsustainable.

Those increased free reserves may well be

needed. ■

Gross Tonnage

Owned 43,900,000Chartered 9,800,000


BBB

Free reserves

2017 188,012,0002016 160,707,0002015 157,414,0002014 160,644,0002013 154,029,000

Managers

A Bilbrough & Co Ltd

Year 2017 2016 2015 2014 2013

Calls/Premium 102,891 110,072 111,290 106,895 101,951




Net Underwriting Result 1,696 15,319 (29,915) (18,736) (14,398)


Total Assets 501,916 505,479 517,374 492,489 521,630


Solvency Margin 1.68 1.52 1.49 1.53 1.46


5%

London Steamship

29%

16%

53%

31%

2%14%

3%

52%

London Steamship

29%

16%

53%

31%

2%14%

3%

52%

S. EuropeFar EastN. EuropeOther

BulkersLNG/LPG & TankersContainerCargo

Tonnage by Vessel

Type

Tonnage by Area

The P&I Report 2017

The North of England P&I Association Limited

Chairman Pratap Shirke reports that 2016

was “another productive and positive year

for the Club”. A combined ratio of 96% was

achieved after a return of 5% of premium,

and added to an investment return of 2.8%

would have produced a surplus of $32m

were it not for an increase of $30m in the

Club’s pension scheme deficit. As a result,

free reserves saw just a small increase from

$428m to nearly $431m.

Claims in 2016 were higher than 2015, due to

a number of large claims in the second half

of the year. At year-end, there had been 34

claims in excess of $1m, compared to 19 in

the previous year.

Owned tonnage grew by 7% to 140m

GT, so the free reserves per owned GT

ratio is down to $3.08 – the lowest in the

International Group except for the Japan

Club.

North is committed to a strategy of

continued diversification aimed at

benefiting the mutual membership.

At the moment, the strategy is based

on the development of fixed premium

business, which now amounts to 30% of

North’s total income and consists of a large

chartered entry (approximately 50m GT)

and the Sunderland Marine (SMI) facility.

Annual fixed premium is now over $90m,

but SMI suffered a loss of $10m in 2016 as

restructuring continues and underwriting

discipline is improved. It is expected that

SMI will finally be fully integrated into the

North group within the next two years.

Shirke does reaffirm the Club’s commitment

to the International Group, and encourages

all Clubs to extol the benefits of the

Group and seek “increasingly innovative

ways to cooperate and assist Members’

requirements”. He also mentions that the

Club’s management holds a number of key

roles in the International Group and, with a

little hint of arrogance, implies that recent

savings in the Group’s reinsurance costs are

down to their leadership of the Reinsurance

Sub-committee. ■

Gross Tonnage

Owned 140,000,000Chartered 50,000,000


A

Free reserves

2017 430,755,0002016 428,109,0002015 338,109,0002014 312,274,0002013 312,236,000

Managers

Year 2017* 2016* 2015* 2014 2013

Calls/Premium 428,348 489,810 526,007 383,534 365,347




Net Underwriting Result 8,248 87,434 (28,347) 20,847 (10,874)

Gross Outstanding Claims 865,610 869,420 1,069,483 964,222 880,655

Total Assets 1,494,210 1,490,314 1,606,592 1,361,357 1,249,306


Solvency Margin 1.73 1.71 1.50 1.41 1.42

Reserves/GT Ratio $3.08 $3.27 $2.66 $2.40 $2.46All figures $’000 * From 2015, figures include Sunderland Marine.

Self-Managed

The North of England

32%

22%

8%

39%

35%

8%6%

12%

3%

35%

The North of England

32%

22%

8%

39%

35%

8%6%

12%

3%

35%

BulkersTankersContainersGeneral CargoOther

EuropeAsia PacificMiddle EastAmericasScandinavia

Tonnage by Vessel

Type

Tonnage by Area

31

32

EuropeAmericasS.E Asia & Far EastAustralia/NZ & Pacific

Africa/Rest of WorldMiddle East & India

HarbourBargesFishingFerries

OffshoreDryTankersYachts

THE SHIPOWNERS MUTUAL PROTECTION & INDEMNITY INSURANCE ASSOCIATION (LUXEMBOURG)

Chairman Philip Orme is delighted to

report that despite 2016 being a year

“dominated by geopolitical upheaval”

the Club has continued to provide its

members with stability and consistency. A

combined ratio of 98.6% was the seventh

consecutive year of underwriting surplus

and with an investment return of $12m,

free reserves have risen by nearly $15m to

$294m.

Tonnage rose by 800,000GT to 25.4m,

with growth in most sectors. The two

main exceptions were the offshore sector,

which continues to be very depressed

(and where the Club decided to reduce

its exposure in Saudi Arabia), and the dry

cargo business, where the commercial

market is pushing premiums down to what

the Cub feels are unacceptable levels.

Annualized premium was down for the

second year running due to the strong US

dollar and the continued downturn in the

offshore area , but the financial year-end

position shows claims for 2016 are 14%

down on 2015.

In his report, CEO Simon Swallow

concentrates on two point; firstly, the

not for profit mutual philosophy of the

Club and International Group results in

a superior product to that offered by the

commercial market - “When revenue

is challenged in any walk of life the

protective response is to try and make do

with less for less” and, secondly, the Club

has no intention of diversifying into new

products but will stick to what it knows

and continue to drive forwards as “the

premier mutual marine liability insurer for

small and specialized vessels.” ■

Gross Tonnage

Owned 25,441,370 Chartered N/A


A

Free reserves

2017 294,041,0002016 279,378,0002015 300,273,0002014 298,555,0002013 234,760,000

Managers

The Shipowners’ Protection Ltd

Year 2017 2016* 2015 2014 2013

Calls/Premium 228,580 209, 881 247,342 243,715 221,925

Reinsurance Cost 27,527 27, 870 36,243 30,664 21,795



Net Underwriting Result 2,802 3,247 11,438 2,334 8,938


Total Assets 823,121 846,880 764,253 779,090 719,969

Average Expense Ratio 22% 21% 20% 18% 20%

Solvency Margin 1.90 1.78 1.96 1.88 1.87


5%

Shipowners mutual protection

21%8%

13%

13%

5%5%

5%19%

50%

15%

10%

4%30% 2%

Shipowners mutual protection

21%8%

13%

13%

5%5%

5%19%

50%

15%

10%

4%30% 2%

Vessel type by number

Tonnage by Area

* 2016 covers the shortened period of 20th February 2015 to 31st December 2015

The P&I Report 2017

Assuranceforeningen Skuld

CEO Stale Hansen reports another

excellent year for the Club. A combined

ratio of 98%, net of a $5m return

to members for 2015, was the 14th

consecutive year of underwriting surplus

and a solid investment return of 3.4% saw

free reserves grow by $46m to $394m.

Hansen does admit that 2016 was not

all plain sailing. It began with several

(nine) large casualties although this

was balanced by the continued low

frequency of attritional claims. The Skuld

1897 Lloyd’s Syndicate failed to add to

the bottom line in challenging market

conditions. On a policy year basis, the

Syndicate shows a loss of nearly $13m

while other fixed business shows a

profit of close to $8m. Hansen states

that measures are in hand to improve

the Syndicate’s performance, including

significant deselection.

The Club’s acquisition of SMA/Gerling

was finalised at the end of 2016 and the

Club reports that all the Hull renewals to

date have been successfully concluded

on Skuld paper.

We imagine the Club was also

disappointed that chartered premium

dropped from $50m to $38m, although

owned tonnage grew to 85m GT.

Hansen states that “Strategic

diversification continues, with the dual

aim of expanding service delivery and

contributing positively to Skuld’s mutual

owners”. The headline for Chairman Klaus

Kjaerulkk’s statement is “The future has

just started”, which perhaps suggests that

the full benefits of diversification may take

some time to come to fruition. ■

Gross Tonnage

Owned 90,800,000Chartered N/A


A

Free reserves

2017 394,075,0002016 348,230,0002015 335,195,0002014 334,548,0002013 308,425,000

Managers

Self-Managed

Year 2017 2016 2015 2014 2013

Calls/Premium 403,235 409,980 411,246 379,391 317,936




Net Underwriting Result 13,946 22,071 786 3,959 969


Total Assets 1,000,465 918,602 903,704 855,985 757,939


Solvency Margin 1.62 1.57 1.63 1.64 1.55

Reserves/GT Ratio $ 4.34 $4.24 $4.19 $4.18 $4.08All figures $’000Note: All figures are Group figures including all business lines, not just P&I.


33%

12%

7%7% 25%

23%

37%

8%

41%

7%


33%

12%

7%7% 25%

23%

37%

8%

41%

7%

BulkersTankersContainersGeneral CargoOther

EuropeAsia PacificMiddle EastAmericasScandinavia

Tonnage by Vessel

Type

Tonnage by Area

33

34

THE STANDARD CLUB

Chairman Rod Jones reports a good

year for the Club, with a surplus of $40m

pushing free reserves over $430m. The

combined ratio was the same as for the

prior year at 95%, but the investment

performance was much improved with

a return of $23m (3%). Total owned and

chartered tonnage rose by 9% to nearly

150mGT.

The Club appears happy to maintain its free

reserves per owned GT at around the $3.40

mark at which it has stood for a number of

years, even though this is somewhat below

the International Group average. It therefore

felt comfortable to return 5% of mutual

premium to members for the 2016 year.

Standard is totally committed to the pro-

diversification camp. Its Lloyds syndicate

appears to be struggling in difficult trading

conditions, with deteriorating results on

both the 2015 and 2016 years of account

and the Club admits it is taking longer

than planned to build the business and

deliver a satisfactory return for the Club.

The syndicate has now branched out into

non-marine business, including political

violence, terrorism and specie.

Other recent ventures include a 50/50

joint venture with Hydor in Norway to

underwrite Scandinavian marine and

energy business on behalf of the Standard

syndicate, and the Singapore War Risks

Mutual, a class within Standard Asia which

has now completed two years without a

claim and insures 12m GT.

The Club has also recently established

a joint venture with the Korean P&I

Association (KPIA), targeting Korean

coastal and regionally trading small craft.

KPIA covers the first $500,000 of each

claim, with Standard Asia then insuring the

excess up to $1 billion on a fixed premium

basis. The Club does mention that this

facility complies with the International

Group Agreement, so presumably the

Group’s long-established philosophy of

not supporting local P&I facilities is now in

question.

Besides diversification, Chairman Jones

also appears to be looking for a Club with

which to merge - “We continue to support

the principle to drive consolidation in the

sector” ■

Gross Tonnage

Owned 126,000,000Chartered 24,000,000


A

Managers

Charles Taylor & Co (Bermuda)

Year 2017 2016 2015 2014 2013

Calls/Premium 338,800 354,300 354,000 336,100 294,100




Net Underwriting Result 17,500 17,700 (400) (4,200) (39,600)

Gross Outstanding Claims 971,100 976,000 1,000,400 986,900 1,005,400

Total Assets 1,477,100 1,426,400 1,449,600 1,395,800 1,429,900


Solvency Margin 1.52 1.46 1.45 1.41 1.42


Free reserves

2017 430,500,0002016 390,100,0002015 380,300,0002014 368,500,0002013 362,600,000

EuropeAsiaUSARest of World

CanadaUK

TankersCargo/ContainerBulkersPassenger &

FerriesOffshoreOther

5%

the standard

31%

22%

2%11%

2%

47%6%

27%

6%4%

32% 10%

the standard

31%

22%

2%11%

2%

47%6%

27%

6%4%

32% 10%

Tonnage by Vessel

Type

Tonnage by Area

The P&I Report 2017

BulkersTankersContainerCruise/Ferry

General CargoOther

Steamship Mutual Underwriting Association Limited

Chairman Armand Pohan reports a third

successive superb year for the Club,

with a combined ratio of 83.5% and an

investment return of 2.8% adding another

$70m to the free reserves, which now

stand at $510m compared to just over

$300m in 2014 – and this is net of the 10%

return on the 2014 year worth $26m.

Pohan states that the main reason for

the 2016 result is, simply, a lack of claims.

Claims were at their lowest for six years

and those within the $10m retention were

down 20% on the comparable figure for

the previous year.

So what is the Club going to do with

all this money? There will certainly be

another return of premium to members

and we hope this will be Gard-like in size

and make a real difference to members.

It looks like the Club could easily afford

to return the full $70m profit of 2016. The

Club is also opening offices in Singapore

and Tokyo during 2017.

It has also decided that the continuing

and improving capital strength of the Club

means it can retain more risk, so it has cut

its reinsurance spend on retention and

Pool claims

Not surprisingly, tonnage continues

to grow with owned GT up by 7m and

chartered entries rising by a massive

15m GT. Despite the increase in

membership and financial strength, the

Club still appears to have no interest in

diversification, with Pohan commenting

“the Board is not convinced that utilising

the Club’s capital in this way is either

desirable or warranted on a ‘risk/reward’

basis”.■

Gross Tonnage

Owned 84,600,000Chartered 66,700,000


A

Free reserves

2017 510,290,0002016 440,321,0002015 376,187,0002014 301,199,0002013 286,207,000

Managers

Steamship P&I Management LLP

Year 2017 2016 2015 2014 2013

Calls/Premium 305,642 350,329 365,341 345,731 315,265




Net Underwriting Result 41,935 76,172 63,304 9,289 (33,775)

Gross Outstanding Claims 765,386 908,028 1,024,708 1,205,156 1,281,692

Total Assets 1,301,995 1,372,979 1,445,909 1,533,031 1,633,952


Solvency Margin 1.70 1.51 1.41 1.27 1.27


steamship mutual

24%18%

3%6%

11% 38%14%

34%

9%38% 5%

steamship mutual

24%18%

3%6%

11% 38%14%

34%

9%38% 5%

Far EastEuropeNorth AmericaLatin AmericaMiddle East/India

Tonnage by Vessel

Type

Tonnage by Area

35

36

Note: items marked * are Group figures and include all business lines, not just P&I.

The Swedish Club

M.D. Lars Rhodin feels the Club “had a

number of significant achievements in

2016, from good growth in P&I, acclaimed

casualty response in a major case, a

successful AGM and member support

events, to our 98% combined ratio result”.

The combined ratio of 98% covers all

business lines, with P&I at 99%, FDD 55%

and Marine/Energy 102%. This produced

an underwriting surplus of $2m, and an

investment return of nearly $10m (2.7%)

saw free reserves rise by $11m to $195m.

For P&I, owned tonnage increased by

over three million to nearly 47m GT, and

chartered tonnage remained stable at 20m

GT.

The casualty to which Rhodin refers was

the TS Taipei which, in March 2016, ran

aground in bad weather off a scenic beach

at Shimen in Taiwan following engine

failure. The crew abandoned ship and

there was considerable pollution when the

vessel broke in two. Under the spotlight of

the media and public concern, the wreck

removal and clean up were completed in

151 days with the Taiwanese authorities

holding a seminar and dinner to celebrate a

job well done.

Business Development Director Lars

Malm reports that the Club is seeing some

success in its objective of expanding in

the tanker sector and also developed two

new products in 2016 – stand-alone Rules

for Charterers and Collision Recovery

Insurance, which provides an owner with

upfront payments of loss of earnings and

deductible expected to be recovered from

the other vessel involved in a collision. In

Malm’s view, “We have a wide range of

expertise across all classes of insurance,

and we channel that experience back to

our members in the form of top class loss

prevention initiatives and new product and

service offerings.” ■

Gross Tonnage

Owned 46,810,000Chartered 20,000,000


BBB+

Managers

Self-Managed

Year 2017 2016 2015 2014 2013

Calls/Premium 104,113 109,958 106,006 99,646 91,742





Gross Outstanding Claims* 259,819 237,936 272,959 318,933 351,349

Total Assets* 516,710 510,744 537,017 547,368 562,829

Average Expense Ratio 13.3% 13.30% 13% 12.10% 13.30%

Solvency Margin* 1.99 2.15 1.97 1.72 1.60

Reserves/GT Ratio* $4.16 $4.19 $4.49 $4.53 $4.34All figures $’000

Free reserves*

2017 194,880,0002016 183,074,0002015 186,342,0002014 167,952,0002013 150,971,000

* All classes of business

EuropeAsia PacificSwedenMiddle East

ContainerTankersBulkers/General CargoOther

5%

swedish club

20%

4%

37%43%

49%

5%

39%

3%

swedish club

20%

4%

37%43%

49%

5%

39%

3%

Tonnage by Vessel

Type

Tonnage by Area

The P&I Report 2017

The UK Mutual Steam ship

37%

4%6%

12%

54%35%

11%

41%

The UK Mutual Steam ship

37%

4%6%

12%

54%35%

11%

41%

The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited

Chairman Alan Olivier is perfectly happy

with the 2016 results which, he feels, meet

the Club’s main objectives of underwriting

discipline and delivery of a consistent

and predictable financial result for the

Members.

The combined ratio was 104%, but a

solid investment return of 4.6% saw free

reserves rise by just over $10m to $558m

(including hybrid capital). Owned tonnage

rose by four million to 139m GT, so free

reserves are equivalent to just over $4 per

owned GT, similar to the ratio over the last

five years so achieving the “consistency”

objective and certainly preferable to

loading the free reserves to unnecessarily

high levels. On the other hand, this does

reduce the potential of windfall returns

to Members, with total returns in recent

years totaling $25m, including 3% for the

2015 year.

The Club does have a reputation for

underwriting discipline, and is not the

home for borderline tonnage or for silly

pricing. Indeed, the Club declined the

opportunity to quote for around 10m GT of

potential new business in 2016.

On the claims front, 2016 net claims after

12 months were higher than the previous

year but still lower than the three previous

years. Collision claims were particularly

significant in 2016, accounting for 12 of the

total 36 claims over $500,000. The Club

lays the blame for these on the failure of

bridge teams to maintain a proper radar

look-out.

The Club calculates that the average cost

of attritional claims (under $500,000)

continues to inflate at 4% per annum, but

the impact of this is concealed by reduced

frequency.

Olivier concludes that the Club entered

2017 in a strong position and well placed

to meet the challenges of the future.

2017 will involve a full strategic review of

everything from capital efficiency to the

use of data analysis and how the Club

can differentiate its product. Interestingly,

Olivier again mentions the disappointment

of the failed merger with Britannia and

whilst this was a bold strategic initiative

by both Clubs and has probably left

some open wounds, the diversification of

products and services via Thomas Miller

Specialty might, in the longer term, prove

to be more than a consolation prize. ■

Gross Tonnage

Owned 139,000,000Chartered 80,000,000


A

Free reserves*

2017 458,400,0002016 447,844,0002015 449,069,0002014 430,004,0002013 394,056,000

Managers

Thomas Miller

Year 2017 2016 2015 2014 2013

Calls/Premium 376,170 385,360 408,059 396,281 360,181




Net Underwriting Result (29,841) 19,316 (20,368) (6,003) (13,233)

Gross Outstanding Claims 924,537 969,305 978,931 1,066,134 1,046,420

Total Assets 1,515,268 1,550,462 1,554,953 1,624,107 1,563,442


Solvency Margin 1.64 1.60 1.59 1.52 1.49

Reserves/GT Ratio $3.30* $3.32* $3.54* $3.47* $3.28*All figures $’000

*Excludes 99m hybrid capital

Tankers/GasBulkersContainerPassenger/Ferry

Other

Europe/M.East/AfricaAsia PacificAmericas

Tonnage by Vessel

Type

Tonnage by Area

37

38

The West of England Shipowners Mutual Insurance Association (Luxembourg)

Chairman Francis Sarre is pleased to

report another impressive year which

sees the Club in its strongest position ever

and finally securing an overdue upgrade

from S&P to A-.

A combined ratio of 87.2% produced an

underwriting surplus of $23m and while

the investment return suffered due to

a currency and valuation reduction on

the London office, it still added a further

$6.6m to the coffers so, overall, free

reserves grew by $30m (11%) to nearly

$307m. Owned tonnage grew by 10m GT

to over 82m.

We mentioned last year that the Club was

unlikely to return premium to members

until it had secured its A rating with S&P.

Sarre comments this year that there is a

question “of the extent to which a pure

mutual Club should continue increasing

its capital strength” and acknowledges

that any form of return would be

welcomed by the Members. We expect

some good news later in the year.

The Chairman also reports that a recent

review of the Club’s longer-term business

strategy has concluded that the Club

“should continue to be committed to

being primarily a dedicated mutual

Club” and “this will ensure that we

remain entirely focused on our core

strengths”. He does, though, admit that

the door remains open to some form of

diversification in the future, particularly if

it could be done on a mutual basis.

The most significant change this year

will see Tom Bowsher succeed Peter

Spendlove as Managing Director and CEO

of the Club’s Managers. We wish Tom all

the best, and also await our invitation to

a suitably lavish party unless the Club

instead decides to match the likes of Gard

and Britannia on premium returns

(page 8). ■

Gross Tonnage

Owned 82,500,000Chartered 30,000,000


A-

Managers

Self-Managed

Year 2017 2016 2015 2014 2013

Calls/Premium 221,849 227,614 216,798 203,311 195,483






Total Assets 938,575 914,348 879,656 810,755 894,939


Solvency Margin 1.56 1.52 1.47 1.48 1.50


Free reserves

2017 306,512,000 2016 276,661,0002015 243,692,0002014 216,196,0002013 197,421,000

EuropeAsiaAmericasOther

BulkersTankersContainersCargo/Reefers

Ferries/Passenger/Other

5%

west of england

32%

4%8%

17%

49%

38%

5%8%

39%

west of england

32%

4%8%

17%

49%

38%

5%8%

39%

Tonnage by Vessel

Type

Tonnage by Area

Tyser & Co. Ltd. of Beaufort House, 15 St Botolph Street, London, EC3A 7EE is an Independent Lloyd’s broker.

We are authorised and regulated by the Financial Conduct Authority (FCA). Our permitted business is

arranging general insurance contracts. Our FCA Register number is 308648. These details can be checked on

the FCA’s Register by visiting the FCA’s website www.fca.org.uk or by contacting the FCA on 0845 606 1234.

Tyser & Co Limited Tel: +44 (0)20 3037 8000

Fax: +44 (0)20 3037 8010

Beaufort House

15 St Botolph Street

London EC3A 7EE

United Kingdom

www.tysers.com

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