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The United Kingdom Mutual Steam Ship
Assurance Association, UK P&I Club,
which held its board meeting in
Kuala Lumpur, has announced a 25 per
cent increase in premium to insure
shipowners' risks in the light of
new perceived threats, especially on
security.
The increase announced by UK P&I
Club - the world's largest club with
vessels more than 100 million gross
registered tonnage - is higher than
the 15 per cent announced by
Britannia P&I Club for liability
cover for shipowners.
It is understood that its meeting in
Kuala Lumpur, the board decided a
general increase in premium rating
of 25 per cent, plus the relevant
increase in cost of the
International Group of P&I Club
reinsurance programme for 2003.
The reinsurance contract is still
being negotiated, and the outcome is
unlikely to be known until close to
the February renewals date.
UK Club officials when met in Kuala
Lumpur said the aim was to reduce
the underlying deficit of premium
versus claims.
Free reserve margin at the club,
which has US$955m in total assets,
declined to US$211m at February
2002, against US$348m a year
earlier, although still above a
threshold at which a reinsurance
contract with Swiss Re would be
activated.
Its return on investments at the
time was -2.8 per cent, although
there is said to have been an
improvement.
In a circular to its members, the
club, chaired by Aleco Kairis,
acknowledged that premium increases
were unwelcome.
It drew attention to the unique
reinsurance arrangement which
remained central to the club's
strategy of protecting members
against unbudgeted supplementary
calls.
Meanwhile, London P&I Club, which
also met in Kuala Lumpur two weeks
ago, is expected to seek a general
premium increase.
The club announced recently that
paid and outstanding claims level at
London P&I Club for the 2001-02
policy year is running at some 20%
less than for the previous year.
London Club's governing committee is
expected to meet in November to
determine the level of advance call
rise needed for 2003.
By that time, it will have a further
update on claims trends and other
factors.
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