Skuld: Policy year 2009 Increases
At the October 7 Board of Directors" meeting, the premium requirements for renewal of the club membership were deliberated in light of the current claims and freight market, as well as the development in the financial markets. In the current policy year, an increase in both frequency and size of ship-owners" claims has been detected.
This is anticipated to continue for some time. We do note that reported pool claims for the 2008 policy year are moderate at the time of writing. However, it would be premature to regard this as evidence of any trend shift.
The management expects a decline in income generated from the charterers" P&I business for the next policy year. This expectation is based on the projected reduction in volume in international trade and subsequent lower involvement of charterers" activity in most international markets.
In light of the above assumptions, and in order to be consistent with our strategy of achieving balanced underwriting results, a general increase of 15 % for the 2009 policy year will be levied for the mutual classes of P&I and FD&D. Further details regarding the general increase will be issued in a circular to members in due course.
The present financial market crisis clearly underlines the necessity of the strategy the club has had for a long time of not relying on investment income to cover running expenses and underwriting losses. The financial crisis is still unravelling but necessary actions seem to be initiated by responsible states. A possible consequence could be that the financial sectors will be trimmed down with a greater focus being placed on business regulatory issues as the world moves forward.
The board of directors are committed, therefore, to stand by our long-term investment policy while keeping a close watch on the risk-bearing capacity of the club.