Strike club rates up 15.0%

Marine protection and indemnity (P&I) mutual insurer, the Strike Club has raised its subscription rates to its shipowner and other marine enterprise members by 15.0% for the 2009/2010 policy year which begins February 1, 2009. The Strike Club covers shipowners against business interruption losses for both onshore incidents such as congestion at ports and off shore incidents such as officer and crew strikes, collisions, groundings, drugs on board, piracy, kidnap-ransom, stowaways and machinery damage. In a statement the Club’s directors said they were prepared to take a hard line on those members with unsatisfactory loss records in terms of imposing increased subscription rates and higher deductibles. Although revenue for the Club’s onshore business has risen by 20.0% for the 2007/2008 policy year, claims were 25.0% higher than the previous year. Indeed, the underwriting accounts for this business class were running at a deficit of 10.0%. Similarly, revenue for the Club’s offshore business was up by 23.0%, but the claims level for the period was 70.0% higher than before. The Club said that despite its prudent investment strategy, which aimed to preserve capital above all else, it does not expect any contribution from investments during the current underwriting year. It blamed this state of affairs on the recent unprecedented turmoil in the financial markets. However, the Club emphasised that it did not expect any significant decrease in its capital base as a result of its investment activities. Bill Milligan, chief executive of Strike Club Management, said the general increase for February’s renewals was on a par with the increases announced by most P&I clubs, while several have had to make additional cash calls. Mr Milligan stressed that the overriding objective for the Club was to try to maintain adequate reserves. He said the marine sector was undergoing cataclysmic changes, which meant that the claims environment would remain extremely volatile. More than ever, shipowners and charterers needed financial protection to cover or offset delays in the transport chain.