Analysis of Major Claims 1990

The Members will be aware that the UK P&I Club has experienced, in common with all other P&l Associations in the International Group, an unprecedented increase in the value of claims from the 1987 policy year onwards, with further sharp increases becoming apparent in the 1989 and 1990 years.

When the first indications of this trend appeared in 1988, your Directors instructed the Managers to prepare a review of the underlying causes of major claims arising after 20th February 1987. The Managers' first report to the Directors in 1989 was based on a sample of just 77 claims. By January 1991 the review had grown to include 918 claims, involving some US $543 million of paid and estimated liabilities.

This programme of review and analysis will continue in future, but has now developed to the point where its findings can usefully be shared and where some preliminary lessons can be drawn on how best to reduce the claims exposure of the Membership.

The scope of the review is described in the section below entitled 'Overview'. That is followed, in the section entitled 'Summary', by a description of specific areas of concern identified by the study. Comments on loss prevention measures follow in the section entitled `Practical Suggestions'. Finally, there are five appendices containing detailed analyses relating to cargo, personal injury, property damage, pollution, and collision claims.

This analysis forms just one part of the larger programme of positive risk management, to which the Association is committed. Last year saw the introduction of a system for the inspection of entered ships, aimed at encouraging higher standards of safe operation and maintenance. These visits, carried out by the Association's own inspectors, have been widely welcomed.

They provide a real opportunity for practical co-operation between the Club and its Members in seeking to prevent losses and, in future, will also serve as a means of focussing on the risk factors which the claims analysis identifies.