Issue 22 - October 1998
Reorganisation sharpens focus on member needs
| Members will have seen in the last issue of UK Club News the extensive network that has been developed for channelling the global strengths of the Club into key centres around the world. Now that the local providers of service and support are in place, the resources of the London office are being re-focused to attend to the European region.
The management of the UK P&I Club is to be reorganised in Europe, Africa, the former Soviet Union, the Middle East and the Indian sub-continent to provide an even higher level of service to meet the needs of shipowners and charterers into the next century. The provision of services to those regions is primarily allocated between offices in London, Sunderland and Piraeus. | 
Stephen James, Chairman of Thomas Miller P&I Ltd. |
Thomas Miller has set up an Area Group system for the Club's Europe Region with effect from September 28th. These Area Groups are an evolution of the traditional syndicate system beyond solely handling claims. Underwriting excepted, all aspects of service provision to the Club's members will be dealt with by these dedicated teams, whose main functions will be general advice, claims handling and promotion of members' interests.
Each Area Group will be headed by an Area Director, whose teams and areas are indicated in the diagram below. Two Regional Operating Directors, Steve Harvey and Simon Main will be responsible for co-ordinating the work of these Area Groups. The new organisation will be headed up by Humphrey Hill, Regional Director, Europe who explained:
“For some years the UK Club has had an area management structure which operated with reference to, but separate from our claims handling syndicates. Claims handling has always been and will continue to be the most time-consuming part of our work. However, it now connects with the longer needs of our members.”
The Area Group system seeks to develop further the constructive relationships established between the membership and their claims handlers by delivering service facilities closer to where they are needed. A typical case is the Greek shipping community. Its importance in ship operations, and the geographic distribution of its management warrants three Area Groups, managed respectively from Sunderland (S2), Piraeus (H1) and London (L1).
There are eleven area groups in the Europe region. They are named according to their location: hence H1 - Hellas, S1 & S2 - Sunderland and L1 - L8 in London.
These Area Group teams in the service structure are generally arranged to cover particular countries, although the specialist teams that have supported special technical needs will remain. The People Claims team, previously known as Syndicate F6, will be divided into two teams. One of these, Area Group L5, will focus on the cruise and ferry business, offshore, industrial disease, the Pre-Employment Medical Examination system, and related risks. L5 will also be providing personal injury claims handling services for Area Groups L4, L6, L7 and L8.
The second, Area Group (L3), will look after the Club's UK, South and West African businesses while providing personal injury support for Area Groups H1, L1 and L2. This group will also manage the provision of UK correspondent services.
Personal injury work for the two Area Groups based in the Sunderland office (S1 & S2) will continue to be handled out of that office.
Although the majority of Far East members have established service links with new Club offices in Hong Kong, China, Taiwan and Singapore, Area Group L8 will be entirely concerned with servicing Far East business in London.
Flexibility is a key aspect of the Area Groups system. The distribution of service provision to achieve a better focus on local needs has not been achieved at the expense of the concentrations of expertise and experience in the Club's traditional claims handling teams. All the Area Groups will continue to benefit from access to the experience of a team of specialists for advice and executive involvement on large and complex claims.
The 1996 independent survey of UK Club members produced a very high level of satisfaction with the managers' activities and achievements. It also indicated a need to sharpen the focus on customer needs, to improve under-standing of member requirements and to strengthen contacts.
It highlighted a number of areas which the new structures and groupings are designed to enhance - high quality service, quick response and action, close personal contact, anticipating industry developments, keeping up with local legislation, championing members' interests, negotiating settlements, encouraging professional competence among correspondents, accuracy in estimating underwriting premiums, fair adjustment of rates at renewal, issuing cover documents and record statements, and helping members with safety and environment issues.
The Club awaits the outcome of the International Group's deliberations with the EC's Competition Commissioner over the IGA. If the Commission's expressed views about aspects of that Agreement prevail, the P&I movement will never be the same again. Even if the fundamentals of the agreement are preserved, the mutual P&I system will have to keep proving itself better than other sources of cover.
Humphrey Hill, European Regional Director | Hill continued, “P&I clubs have found that their advisory roles have become relatively more important, as owners and charterers, unable to carry the costs of a range of advisers, have looked to Club managers for advice on OPA '90, STCW, PSC, ISM, Year 2000 and other issues. All this tends to emphasise the specialist nature of P&I insurance and the vital importance of retaining and fostering a body of expertise in underwriting and claims handling. There is certainly no way that the commercial market will provide the same cover or range of services.” |
In the past couple of years, the Club has opened offices and expanded operations in key maritime centres around the world - New York, San Francisco, Miami, Singapore, Hong Kong, Taipei, Shanghai and Beijing. The policy has proved very popular with members. Within the Europe Region, Piraeus has been added to the London and Sunderland offices, while the question of other locations being kept under review.
It is clear that Club members feel the concentration of executives on geographical areas is a vital aspect of providing them with greater knowledge and awareness of legal and regulatory regimes, port requirements, correspondent services and the shipping community.
Stephen James, Chairman of Thomas Miller P&I Ltd, summed up the reorganisation saying, “As the world's leading marine mutual, the UK Club intends to stay in the vanguard of change and development in shipping insurance. The area groups provide a greater ratio of claims executives to members in smaller, more concentrated teams. Altogether better equipped to serve the broad range of the Club membership.”
Risks, Claims and Containers
The production of advice and assistance to help prevent claims and injuries is a never-ending task. Loss prevention materials and publications on the slipway currently include:
 |
- Large Claims Analysis - Not content with providing a unique source of data on marine liability claims, the 'Large Claims Analysis', the UK Club's Loss Prevention team has its eyes on the next mountain peak to be conquered! The next evolution of this publication will seek to identify claims trends by digging deeply into the major claims of the past ten years.
- Loss prevention videos - As the sampler video, 'Loss Prevention Initiatives', nears completion, the team are already hard at work producing the next in the series of 'Matters' videos - this one on the subject of container claims. 'Container Matters' will be released in May 1999.
- Risk Management book - the Club is continuing its successful collaboration and sponsorship of high-quality publications by the Nautical Institute with the latest, 'Risk Management in Shipping', due to be published in November 1998.
|
| Members who wish to receive any of these publications, or who would like to request further copies of current or previous publications should contact Karl Lumbers by fax +44 171 283 6517 or email to karl.lumbers@thomasmiller.com. Alternatively, requests can be made on the Loss Prevention page of UK Club's website. Comments on any loss prevention issues can also be directed to the editor of UK Club News, e-mail to nick.whitear@thomasmiller.com or fax: +44 171 621 9761 who will forward them on. |
Three-centre launch for Tanker Matters
| 'Tanker Matters', the UK Club's latest loss prevention video, was screened in May to audiences of owners, operators and other maritime figures in London and Hong Kong and at the INTERTANKO conference in Singapore.
The 40-minute production, for use on board ship and in offices, focuses on incidents which give rise to claims. The complementary 'Tanker Risk Profile' in CD-ROM format presents data about tanker claims of at least $100,000. Over 1,700 copies of the video and nearly 1,000 copies of the CD-ROM have been distributed to UK Club members.
Copies of the video were presented to Mr Barry Desker, Chief Executive of the Trade Development Board of Singapore, and to Lord Donaldson.
Top: Nigel Carden chats to Lord Donaldson at the launch.
Opposite: Nick Sansom presents Mr Barry Desker with a copy of the new video. | |
Kirchner and Ng in charge
Americas - Loss prevention activities in the Americas region are the responsibility of Leo Kirchner (LMK), Manager Central Services. Leo joined Thomas Miller (Americas) in 1995. In addition to his loss prevention role, he heads the quality team in the Americas region which has responsibility for management and information systems for all Thomas Miller (Americas) offices. Leo has seventeen years experience in various marine fields, most recently as claims manager for a large liner service.
Direct line: +1 201 557 7431. e-mail: leo.kirchner@thomasmiller.com
Asia Pacific - Similar support to members in the Asia Pacific region is entrusted to Danny Ng, based in the Club's Hong Kong office. A master mariner with 20 years' experience, Danny has worked for a P&I club correspondent and shipowner's office in Hong Kong.
Direct line: +852 2832 4446. e-mail: danny.ng@thomas miller.com
The loss prevention function of the Club, in common with its other member service functions, is distributed between the London and regional offices. The department also combines the practical inspections and guidance of the ship inspectors with the claims analysis and research of its office based executives. The net effect is to provide the right combination of expertise and effort to all the Club's members regardless of their location.
The full complement of loss prevention and ship inspection staff for the UK P&I Clubs international membership is listed in the forthcoming Club directory, Making Contact.
Bulletins tell members about loss issues
As part of a growing range of IT-based tools and support services to members, the UK Club has been dispatching electronic loss prevention bulletins to its members both by e-mail and via the Club's web-site. The bulletins utilise electronic communication to provide timely information on risk and liability issues in a format that can be forwarded within members' organisations with the minimum of effort and delay. Since the bulletins began last year, over 60 have been issued. Topics have included the theft of reefer containers in Hong Kong, pollution fines in Egypt, naptha contam-ination, grain fires caused by fumigants, and Brazilian ordinances on stowaways.
To obtain bulletins, members should forward their e-mail address to Karl Lumbers at karl.Lumbers@thomasmiller.com or call/fax the UK Club News Editor. Feedback on contents and format would be most welcome.
Over 1,000 take part in online forum
 | In its first year of operation, over 1,000 UK Club members, correspondents, surveyors and adjusters have taken part in the Club's Online discussion forum.
It was set up to co-ordinate the unrivalled experience and expertise of maritime risks and hazards among members and associated professionals. Ideas are discussed and IT utilised to optimise the scope and speed of response.
The service is free but forum users must register with the Club to ensure security. To join, enter the TM-ONLINE address into your web browser - http://www.tm-online.com - and follow the onscreen guidance instructions. |
Free Reserves up again
 An improvement in estimated and forecast liabilities and strong investment returns meant that the free reserves of the United Kingdom Mutual Steam Ship Assurance Association for the year ended February 1998 were greater than the previous year's record level.
As a result, the Association's Board decided to restrict further growth in the funds by reducing the supplementary call for the 1996 policy year from 40 to 25 per cent. It was the fourth time in five years that continuing strong finances had produced a reduction in the planned call for supplementary premiums from UK Club members.
The Club's annual report revealed that estimated and forecast claims stood at US$844 million, compared with US$874 million for 1996/1997. The improvement was boosted by a return of 9.6 per cent on invested funds, compared with 5.4 per cent in the previous year. While fixed interest investments remained the mainstay of the portfolio, equities increased to 27 per cent.
The various reserves which protect members from unexpected rises in claims costs while meeting the solvency requirements of insurance regulatory authorities rose significantly. At year end, they were as follows:
Contingency (which protects members against possible claims for the closed policy years): US$474 million
Catastrophe (for purchasing overspill reinsurance): US$54 million
United States Oil Pollution Additional Premium Reserve: US$17 million.
Without discounting and excluding the 1997 planned supplementary call, free reserves amounted to US$290 million, a $44 million improvement on the previous year. Discounting the net present value of claims by 4 per cent, they rose to US$454 million.
The year saw a reduction of some 40 per cent in the cost of reinsurance, purchased through the International Group of P&I Clubs. This followed the 15 per cent reduction achieved in 1996.
| Investment Income
Unlike some international group clubs, the UK Club does not attribute investment income in the current year to the most recent open policy year. It allocates the income over all the reserves not just the most recent policy years. Most investment income earned in the year under review, therefore, is allocated to the contingency account. This approach produced deficits on 1995, 1996 and 1997 policy years. If the investment income in the current financial year was included in the current policy year the deficit becomes a surplus. |
Inspector Pilley calls it a day
 Richard Pilley, the UK Club's founder-manager of Ship Inspection, has retired after 16 years. Miller's provided Richard with his second career. He had already spent 27 years as a seafarer when he came ashore to work as a claims executive in 1982. In January 1986, he became syndicate manager, remaining in charge for the next four years, servicing tonnage in China, Hong Kong, Korea, Singapore, Spain and North and South Africa.
The ship inspection department was established in 1990, because of concerns about the effectiveness and relevance of classification surveys as a safeguard of the quality of the Club's membership. Richard led his team in identifying unacceptable tonnage and in encouraging higher operating standards. His twice-yearly reports to the directors were never predictable. Coloured by illuminating metaphors, ships were compared to medieval cathedrals and the inspector's approach to that of a dentist who digs deeper when he spots decay.
Richard produced two major reports based on statistics collected by the inspectors, edited 'Carefully to Carry', contributed frequently to seminars and conferences, and proved an excellent interpreter of the practical meaning of statutory regulations. He ran his department with quiet efficiency. We wish him well in his future activities with the Maritime Law Institute at Southampton University.
Ship Inspection is now in the safe hands of Karl Lumbers, already well known to Club members as the manager of loss prevention. These two closely related functions will be combined under Karl's leadership to develop the synergies between them.
Tackling the Millennium Bug
Website
The Ship 2000 Website (http://www.ship2000.com), an initiative involving Lloyds Register, the UK Club, the TT Club, BIMCO and the ICS, was launched in May.
It provides basic background information on the problem, and contact details of the manufacturers and suppliers of marine equipment and suppliers of Y2K services. The data on this Website is building only slowly and active consideration is being given to explaining its role still further.
 Toolkits
Ship2000 Tool Kits were distributed to members during May. As well as background information on the issues, these provided a suggested methodology for addressing the problem, supported by a 'generic ship' model and a matrix for preparing Y2K inventories.
Conferences
Conferences were held in June in Singapore, Hong Kong, London, Miami and Athens, sponsored by members of the International Group, supported by the TT Club, ITIC, BIMCO and the ICS. Over 500 delegates attended.
Awareness within the industry has risen to a point where is has become difficult to open a newspaper or trade magazine without reading the dreaded words 'Y2K Time Bomb'. There is now a danger that people will get bored with the subject which would be unfortunate as it is now vital to concentrate on prioritising commercial and safety aspects and preparing contingency plans.
While 1st January 2000 is the most problematic date for computers and software, there are others. Potential problems arise with global positioning satellite (GPS) navigation systems on the 21st August 1999 since that date ends a 1,024 week cycle. As 2000 is a leap year, systems may have difficulties with 29th February.
If the effect of the Millennium Bug is minimal, it will reflect awareness and providing practical help. Any members requiring assistance should get in touch with their usual club contact, Roger Nixon (fax: +44 171 204 2167 email: roger.nixon@thomasmiller.com) or Malcolm Dixon (fax: +44 171 204 2167 email: malcolm.dixon@thomasmiller.com) at the Club's London office.
Thomas Miller opt for private company
Mutual club managers Thomas Miller have decided to replace their partnerships with a private company from early next year.
The wholly-owned corporate structure through which they have operated for some years will remain, but its owner will be the new private company.
Terence Coghlin, the senior partner, said: “we feel that this fully corporate structure will be more appropriate for the type of work that we do for our clubs. It will also enable us to manoeuvre more quickly and surely as we seek to meet the changing needs of our international clients in an increasingly volatile insurance market. In addition, we will be able to distribute the ownership of Millers much more widely among our 550 staff in America, Asia Pacific and Europe.
“In opting for private company status, we have expressly rejected the option of a public flotation and have no plans to move in that direction,” continued Mr Coghlin. “We want to continue to control our own destiny and to avoid having to juggle the interests of our clients with the demands of public company shareholders.
“The change will strengthen the internal governance of Millers and increase our ability to recruit and retain the high quality individuals whom we need to maintain and develop our service to our clubs and their members. The quality of that service will remain, as now, our chief concern.”
Among the mutuals managed by Millers are the UK P&I Club, the TT Club, ITIC and a number of clubs covering UK professional groups against claims for negligence.
ISM Certificate - a term of cover
The international Group has agreed that possession of valid ISM certificates (as required by flag states) should be a term of cover.
An amendment to the UK Club's rules denies recovery as of right for any claim arising from events which occur while the owner fails to maintain valid ISM certification. The Board retains a discretion to consider claims of uncertificated members, with progress towards certification being regarded as very relevant.
Members and potential members of the UK P&I Club should ensure that the relevant copies of documentation have been passed to the Club. The membership application form highlights the need for satisfactory evidence of certification prior to any terms being offered. Existing members seeking renewal at 20th February will be able to negotiate terms but cover will be subject to receipt of the relevant ISM documents before the start of the new policy year.
The UK Club has long identified human shortcomings as the most important factor in causing major liability claims. Now, the ISM Code and revisions to the STCW Convention have brought the human side of ship operations into the regulatory spotlight. It may take a while before the benefits of the Code are felt but they will surely be seen in due course.
The UK Club has explained the effect of ISM on cover in its circular ISM (International Safety Management) Code - Evidence of Certification dated July 1998, reference number 11/98.
If you have any general queries regarding the Club's position, please contact Nigel Carden in London (fax: +44 171 621 1782 email: nigel.carden@thomasmiller.com). Members supplying ISM certification to the Club should direct their documentation to their usual Club contact or to Mrs Julie Page at the London office.
UK Club circulars
The implementation of the ISM Code and concerns over the Year 2000 computer problem are among the issues addressed by recent UK Club circulars. Set out below are those issued since January 1998. If you require further copies or wish to clarify any points, please call your regular Club contact or Nigel Carden at the London office.
UK CLUB NEWS is published by
Thomas Miller & Co. Ltd.
International House
26 Creechurch Lane
London EC3A 5BA
Tel +44 20 7283 4646
Fax +44 20 7283 5614
Editor: Nick Whitear
Tel +44 20 7204 2334
Fax +44 20 7621 9761
e-mail: nick.whitear@thomasmiller.com
For and on behalf of the Managers of
The United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited
The United Kingdom Freight Demurrage and Defence Association Limited
|
