Circular 10/01: Chairman's Letter re General Increase for 2002 Policy Year

  • Date: 01/10/2001




Attached to this letter is a circular announcing, inter alia, the decision of your Board to order a general increase of 20 per cent of premium rating, plus the increase in reinsurance costs, for the forthcoming 2002 policy year. This is a significant increase, and I want to explain the reasons for it.

First of all, the Association is one of the most strongly funded of P&I Clubs. In past years healthy investment returns have enabled the Association to maintain that strong position while at the same time reducing the premium cost to Members through successive cuts in planned supplementary calls. However, the downturn in the financial markets, particularly equities, over the last eighteen months means that the pure underwriting deficit is no longer being covered by investment income and the free reserves are being eroded.

Looking ahead, the Board is of the view that the strong investment returns of the past cannot be expected to be repeated in the future, and if the free reserves position is to be maintained a significant increase in premium is required.

Of course, the Association's financial strength is underpinned by its unique reinsurance contract with the AAA rated Swiss Re which would operate to support the Association's position if the free reserves fall below the target range set by the Board. However, it is the Board's policy to plan to maintain reserves above the trigger point for the Swiss Re contract, and to rely on that contract for an unforeseen, rather than a foreseeable, fall in the free reserves.

Hence the Board's decision to order a 20 per cent increase. The increase in the cost of the International Group's reinsurance programme, which is to be added to premium rating, is not yet known, but it is likely to be at least 20 per cent of the current reinsurance cost.

In summary, therefore, the Board is determined to maintain the financial strength of the Association. My fellow Directors and I trust that you will agree with our view that this strength is particularly valuable at this time of uncertainty in the world's financial and insurance markets.

Yours sincerely


A G Kairis


Dear Fellow Member

Industry developments

Polar Shipping

Legal, navigational and environmental resources, news and updates on the development of polar shipping. Read more

US VRP Compliance

With effect from 30th January 2014 non-tank as well as tankships calling at US ports will be required to submit VRPs.  For Club and other resources to assist in compliance click here

International Environmental compliance

Environmental Compliance resource page collates material in respect of International environmental compliance issues affecting our Members. Information from the Club, Loss Prevention and external resources has been collated in one place for ease of reference.

MLC 2006

The Maritime Labour Convention enters into force in August 2013 - resources, news & advice on implementation can be found in this dedicated section.  READ MORE

International sanctions

Recent guidance & corresponding material in respect of international sanctions against various countries has been updated with respect to temporary easing of sanctions against Iran.  READ MORE


Essential precautions and preparation against piracy, as well as additional information and resources, loss prevention advisories and useful external web links

Emergency Contacts

If you need to call our offices out of hours and at weekends, click After Office hours for a up to date list of the names of the Duty Executives and their mobile phone numbers. 

Ship Finder

This Ship Finder is updated on a daily basis. Members who need to advise the Club of updates to their recorded ships' details should advise their usual underwriting contact.