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Shipowners may face another
liability round of renewals as P&I
Clubs meet in Kuala Lumpur and
elsewhere with the first clear sign
of general increase already posted
by Britannia P&I Club.
Britannia's board meeting in Vienna
last week announced a 15 per rise in
advance calls from February 20,
2003.
The club is one of the three
largest, covering some 86 million
gross tonnage of shipping, of which
67 million gross tonnage is owned
tonnage.
P&I Clubs, composed of membership of
shipping lines, offers third party
liability insurance to shipowners,
operators and charterers on a
mutual, non-profit basis. The clubs
usually handle claims ranging from
crew sickness ot cargo damage to
full cost of oil spills and other
disasters.
In Kuala Lumpur, two of the world's
largest P&I Clubs are meeting,
including the London P&I Club,
managed by Bilbrough & Co Ltd, which
held its annual general meeting
outside United Kingdom.
Members of the London P&I Club
include Malaysia International
Shipping Corporation Bhd.
This week, the UK Mutual Ship
Assurance Ltd P&I Club meets in
Kuala Lumpur attended by leading
shipowners in the world to discuss
among other issues the issues that
are impacting on the risk assessment
and management of liabilities in the
light of new security and safety
challenges.
With Britannia's increase, analysts
expect many other clubs to seek
increases of about 20 per cent or
even more, as underwriters seek to
cover investment losses.
The increase sought by the P&I
providers could exceed US$2 billion
in premiums for the policy year
beginning next February, industry
sources said.
Shipowners are also expected to
contend with other insurance
factors, namely added premiums (of
about 16-18 per cent) to cover the
cost of group reinsurance, (a common
contract for which negotiations have
begun in the Lloyd's and companies
market) that is expected to bear
most heavily on tanker operators.
Shipowners will also pay more as
Hull underwriters are looking for
substantial premium increases
following a rash of casualties that
have hit the global marine market
for more than US $750m.
In addition, war risk underwriters
giving specific P&I and hull cover
are demanding extra premiums for
areas excluded from normal war
cover, following renewed concerns
about land-based and maritime
terrorism.
Meanwhile, the bombing incident in
Bali, Indonesia has promoted Lloyds
war risk committee to remove
Indonesia from the areas excluded
from war risks.
Shipping costs to Indonesia may thus
rise in the wake of the exclusion
leading to a rise in insurance
premiums for shipowners.
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