UK P&I Club announces general increase for 2013

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The board of the UK P&I Club announced a general increase of 7.5% for 2013 when it held its annual board meeting this week.

 The premium rating increase is in addition to any increase in the cost of the International Group reinsurance premium for 2013 for the mutual members, which will be determined in the new year.

Recognising the challenges faced by its members and the Club’s strong capital position, the Board has separately declared a Mutual Premium Discount of 2.5% on the total mutual call for the 2011 policy year. The discount will amount to a 10% deduction for all mutual members for the final instalment of the 2011 call due in December this year.

In an environment of increasing claims costs despite a shipping recession, the Club said it needed to keep premiums moving forward in line with the actual claims experience. The general increase is a step towards addressing underlying claims inflation, as well as the anticipated future rebound in claims frequency from what have been record low levels.

Dino Caroussis, chairman of the UK P&I Club, said: “The decision to make a 7.5% general increase reflects the Board’s determination to keep the Club’s underwriting in balance. The Board has made the decision for a relatively modest premium increase in the short term as opposed to more substantial and painful increases in future.

“Ship owners are facing extremely challenging conditions. We are therefore pleased, given our strong capital position, to be able to reduce the premium on 2011, which was a good year for the Club. However, the Board feels it would be clearly against the interest of members if a club does not increase premiums in an inflationary environment and potentially create a problem for the future.”