Tysers P&I Report 2015

International Insurance and Reinsurance Brokers
The P&I Report 2015
Contents
About Us
P&I Team Contacts
How Will They Spend the Money
6-7
P&I Club Information

A merican Steamship Owners Mutual Protection
& Indemnity Association, Inc.

8

Summary of 2014/15 Results
Gard P&I (Bermuda) Limited
& Indemnity Association
10
Standard & Poors Ratings of P&I Clubs
11
Average Expense Ratios (AER)
12
T he North of England P&I Association Limited
General Increases
13
T he Shipowners Mutual Protection
Freight, Demurrage and Defence Summary

Pooling and Reinsurance
Insurance Association Ltd
25
26
27
28
Assuranceforeningen Skuld
29
15
The Standard Club Ltd
30
16
T he Steamship Mutual Underwriting

Association (Bermuda) Ltd
Excess of Loss Reinsurance Rates
24
L ondon Steamship Owners Mutual
& Indemnity Association (Luxembourg)
14
23
T he Japan Ship Owners Mutual Protection
P&I Market Share
Supplementary Call Record
22
T he Britannia Steam Ship Insurance

Association Limited
International Group 2015 League Tables
19-21
17
Estimated cost of notified Pool claims
17
Current International Group issues
18
The Swedish Club
T he United Kingdom Mutual Steam Ship
Assurance Association (Bermuda) Limited
31
32
33
T he West of England Shipowners Mutual

Insurance Association (Luxembourg)
34
About Us
Founded in 1820,Tysers is a leading independent international Lloyds broker that is based at the heart of the
worlds premier insurance market in London.Tysers employs some 240 people; handles over $800 million of
annual premiums; and works with leading insurance markets worldwide to deliver risk solutions to a global
client base. All departments management, brokers, claims, technical, accounts and documentation are
based on the same floor in the Beaufort House office, ensuring a seamless, professional service backed by
expertise across a wide range of specialist insurance classes.
Not surprisingly for a company that started life nearly two centuries ago and spawned a shipping line,
Tysers Marine division is one of the oldest and most highly respected in the London market. All our people
are client focused and combine to provide a fully integrated broking, administration and claims service.
Key Strengths
Areas of Expertise
Global expertise With particular strength in the UK,
Protection and Indemnity, FDD, other Marine
Europe, Indian sub-continent, South East Asia, the Far
Liabilities including Contractual and Specialist
East and South America.
Operations

Charterers Covers
Containers and Chassis
competitive pricing. We work with all 13 Clubs in the
Ship Agents Liabilities
International Group.
Ports and Terminals
Loss of Hire/Trade Disruption
of expertise to put at clients disposal, having worked
Hull & Machinery
previously for International Group P&I Clubs, leading
War Risks
insurers and other major brokers.
Piracy
Established market presence Strong relationships

with Market and P&I underwriters facilitate
Extensive experience Our team has a unique blend
Reinsurance expertise Our reinsurance clients
range from the London Market to other major marine
Reinsurance
underwriting centres, P&I Clubs, fixed premium and
Builders Risks including Related Delay Covers

and Contract Repudiation
overseas insurers.
Proactive claims service Our integrated claims team
is involved in all accounts from day one, before any
loss occurrence. The broking and claims teams work in
harmony to deliver a complete service.
Kidnap and Ransom
Mortgagees Interest
P&I Team Contacts

Martin Hubbard
Simon Smart
Email: martin.hubbard@tysers.com
Email: simon.smart@tysers.com
Direct line: +44 (0)20 3037 8309
Direct line: +44 (0)20 3037 8303
Mobile: +44 (0)7971 501 747
Mobile: +44 (0)7801 553866
40 years P&I experience, mainly as a Senior
Over 20 years a P&I broker, joined Tysers in 2012.
Underwriter and Director with the Steamship Mutual

Underwriting Association Ltd. Joined Tysers in 2005.
Ian Harris
Piers OHegarty
Email: ian.harris@tysers.com
Email: piers.ohegarty@tysers.com
Direct line: +44 (0)20 3037 8301
Direct line: +44 (0)20 3037 8315
Mobile: +44 (0)7881 265060
Mobile: +44 (0)7971 501 742
Ian joined Tysers from Willis in January 2014, and has
Joined the Marine Division in 1999 having
nearly 40 years P&I and H&M experience, including
previously been with Sedgwicks and Aon.
ten years in claims.
Julien Hubbard
Chris Sydenham
Email: julien.hubbard@tysers.com
Email: chris.sydenham@tysers.com
Direct line: +44 (0)20 3037 8308
Direct line: +44 (0)20 3037 8340
Mobile: +44 (0)7971 501 770
Mobile: +44 (0)7971 501 772
A marine broker since 1990.
Claims Director, responsible for all Marine claims.
Joined Tysers in 2004 from Miller Marine.
Over 30 years with Tysers.
Jason Crowhurst
Simon Haycock
Email: jason.crowhurst@tysers.com
Email: simon.haycock@tysers.com
Direct line: +44(0)20 3037 8357
Direct line: +44 (0)20 3037 8342
Mobile: +44(0)7824 463735
Mobile: +44 (0)7971 501 757
Marine Claims Manager. Joined Tysers in 2011.
Marine Claims Manager. Joined Tysers in 2005.
How will they spend the money?

A second consecutive quiet year on the claims front now sees the
We do believe that S&P now has too much influence over
International Group awash with cash, to the extent that unless
the International Group and, having announced that it was
Clubs return money to their members this year we would have to
withdrawing public information ratings for insurance companies
question whether one of the basic principles of mutuality is dead
in Western Europe, all Clubs feel obliged to pay S&P for an
in the water. The average net combined ratio for the Group was
interactive rating, with London Club the last to succumb in
just under 100%, and an overall net surplus of $325 million has
December 2014. We now have eight A rated Clubs, three at BBB+,
pushed total free reserves over $4.6 billion, which in our view, and
and only the London and American Clubs at a lower rating. Sadly,
we suspect the view of more than one member of the IG Group, is
the Clubs attach so much importance to their rating that they are
excessive. Perhaps there are other dark forces at work which are
under continuous pressure to keep increasing free reserves, to the
driving this relentless accumulation of free reserves .
detriment of their members and the basic concept of mutuality.
Only one Club, London, failed to record a surplus in 2014 and their
With S&P and regulators also preferring multiline insurers, is
net combined ratio of 134% is a worry. They have survived for some
there a long term future for any monoline mutual P&I Club? The
years on the back of excellent investment returns and free reserves
Scandinavian Clubs clearly think not, and Standard and North
of $3.59 per owned GT still look adequate, but a poor investment
are in the same camp. UK and Britannia appear to be happy as
year would soon change the picture unless the technical result
they are, with Britannias Chairman Nigel Palmer stating in the
improves dramatically. North also had a poor year P&I-wise but
Clubs annual review that the IG systemhas served Members
were saved by a timely surplus of $41 million from their Sunderland
well and it is essential that the broader commercial ambitions of
Marine business, one in the eye for those who deny the benefits of
some do not destroy it, to the long-term detriment of the majority
diversification or consolidation. Steamship Mutual and Britannia
of shipowners worldwide. At least these two Clubs have size on
(including Boudicca) were the stars in terms of growth in free
their side, but what of the smaller, more conservative and focused
reserves and Gard continues to return funds to the members. All
Clubs such as West of England and London? Can they withstand
the other Clubs made good progress, except for the American Club
long-term the pressures of S&P and the diversified or larger
whose owned tonnage is now below 14 million GT.
Clubs, and will the cracks in relationships between the Clubs,

which we mentioned last year and which have been raised again
The Groups free reserves have developed as follows:
this year in some quarters, continue to grow and to erode the
Year
Owned GT
Free
Reserves
Reserves
per GT
2011/12
988,000,000
3,955,000,000
$4.00
2012/13
1,036,000,000
4,086,000,000
$3.94
2013/14
1,076,000,000
4,318,000,000
$4.01
be no assumption the International Group will exist in its current
2014/15
1,104,000,000
4,623,000,000
$4.19
format in ten years time. This is sad, as the mutual system has
What are the free reserves for? In the old days, they were used
to smooth over a bad year, providing a buffer to try to avoid
unbudgeted calls. Today, they are also required to meet regulatory
requirements (particularly Solvency II which at the moment is due
for implementation in January 2016) and also to satisfy what we
feel are the misplaced requirements of Standard & Poors (S&P).
basis of the International Group?

Many top P&I managers are now getting close to retirement and
the next generation will face a much tougher life and some very
difficult decisions. Standing still is not an option and there can
served shipowners so well for so long but, rather like the author
of this Report, it is now creaking at the joints.
Our view remains that Clubs need either to follow the Gard
diversification model, or to merge so that all Clubs have an
influence in the market. A minimum owned tonnage of 100 million
GT and minimum free reserves of $3.75 per owned GT is our
preferred solution for a stable future.
What can we expect at the 2016 renewal? We are worried that
b. reserve risk (the risk that the claims reserves established in
despite two quiet years and the average combined ratio now
respect of past policy years prove to be insufficient to cover
where it should be at a fraction under 100%, a number of Clubs
the ultimate cost of the claims);
keep referring to a hostile claims environmnent as if to warn

us that premiums will continue to rise. Last year saw an average
c. catastrophe risk (the risk of one or more claims running into

hundreds of millions of dollars);
general increase just over 3%, with three Clubs opting for no
d. market risk (the risk of losses on investments, liquidity risk,
increase at all. We do believe that the 2016 average should
and currency risk);
be lower than 2015, and that the majority of the International

Group is in such a strong position that it should not require any
e. counterparty default risk (the risk that a Club is unable to
increase. The one caveat is the current turmoil in global stock
recover amounts due from a member, a deposit-taker such as a
markets which will certainly hit the Clubs investment returns,
bank, or a reinsurer),
but there is $4.6 billion in the kitty to cover possible investment
f. operational risk (the risk of losses arising from inadequate
losses and any upsurge in claims. We further feel that a number
or failed internal processes, people or systems or from
of Clubs should be able to follow Gard and return premium to their
external events)
members, particularly Britannia, UK and Steamship Mutual. The

simple message to the Clubs is that they have too much money,
Sadly, this has led to no more disclosure than in the past and the
shipowners need a break and any owner with a good or even
following statement from the American Clubs Annual Report is
average record should not be asked to pay more. Lets have a
typical of all Clubs failure or refusal to explain adequately their
sensible mutual approach rather than one dictated by S&P.
release call calculation:
Finally, we should update you on that unsavoury aspect of

mutuality release calls. Following discussions with the European
Commission, the International Group Agreement was amended to
provide that each Club must publish at least annually its release
In conformity with this policy, in November 2014, being the same

time at which individual open years release call margins were
notified to Members, the Clubs Board explained the factors which
it had taken into account in calibrating the figures in question.
calls, with an explanation of the factors taken into account in

setting the release call percentages, which must include objective
actuarial information regarding:
Specifically, these were premium risk, catastrophe risk, reserve

risk, market risk and counterparty default risk, as well as the
exposure of the Club generally to the wide variety of operational
risks which, over time, it needs to consider in determining both its
a. premium risk (the risk that the premiums to be charged in

respect of the current policy year are insufficient to cover the
claims that arise in respect of that policy year);
basic premium and, more particularly, release call needs in regard

to all open policy years.
Is this really all that the European Commission required and does
it in any way explain or justify release calls as high as 20%?
American
Britannia
Gard
Japan
London
North
Shipowners
Skuld
Standard
SSM
Swedish
UK
West of
England
Release Calls as at September 2015
2013
20
7.50*
12.5
7.50
10
3.7
2014
20
7.50*
15
15
10
12.50
15
7.4
2015
20
15*
20
15
20
15
15
20
15
14.8
* Percentage of advance call. All other figures are percentage of total premium.
Fourth Division:
Third Division:
Second Division:
Premier Division:
International Group 2015:
Summary of 2014/15 Results

U/W Profit/
Loss 2014/15
($M)
Net
Combined
Ratio
2014/15
Investment
Income
2014/15
($M)
Surplus Feb
2015 ($M)
American
(7)
106.9%
59
14
$4.22
Britannia*
63
71.5%
12
74
546
109
$5.03
Gard
10
98%***
23
25***
969
189
$5.12
100%
43
31
172
93
$1.85
London
(30)
134%
28
(3)
157
44
$3.59
North**
(28)
109%
25
26
338
127
$2.66
11
94.6%
(10)
300
24
$12.74
Skuld
99.8%
14
13
348
83
$4.19
Standard
100%
12
12
380
112
$3.41
63
78.6%
12
75
376
74
$5.06
87%
17
186
42
$4.49
(20)
104.6%
47****
25
548
127
$4.31
97.4%
25
28
244
68
$3.61
Total
72
Average
98.57%
Total
242
Total
325
Total
4,623
Total
1,104
Average
$4.19
Club
Japan
Shipowners
Steamship
Swedish
UK
West
Free
Free
Total Owned
Reserves
Reserves
GT Feb
Feb 2015
Per Owned
2015 (M)
($M)
GT Feb 2015
Figures in red are consolidated figures covering all lines of business rather than P&I alone.
*
Includes Boudicca
**
See Club review for explanation of figures
*** GARD NCR and Surplus are net of $37m return on 2014 deferred call. On ETC basis the NCR is 91%
and the surplus $87m. Surplus is also net of pension liabilities
**** UK investment income is net of $7.5m interest paid on perpetual subordinated securities
P&I Market Share

These comparisons show the relative size of P&I Clubs by owned gross tonnage, financial year income and free reserves as at 20
February 2015.
P&I Club
Owned GT
Accounting Year
Premium $
Free
Reserves
Gard
189,000,000
17.12
628,672,000
15.75
968,590,000
20.95
UK
127,000,000
11.50
408,059,000
10.22
547,766,000
11.85
North of England
127,000,000
11.50
526,196,000
13.18
338,109,000
7.31
Standard
111,500,000
10.10
354,000,000
8.87
380,300,000
8.22
Britannia
108,500,000
9.83
269,726,000
6.75
545,567,000
11.80
Japan
93,400,000
8.46
233,096,000
5.84
172,369,000
3.73
Skuld
83,000,000
7.52
411,246,000
10.30
347,685,000
7.52
Steamship
74,300,000
6.65
365,341,000
9.15
376,187,000
8.14
West of England
67,500,000
6.12
216,798,000
5.43
243,692,000
5.27
London
43,800,000
3.97
111,290,000
2.78
157,414,000
3.41
Swedish
41,500,000
3.76
106,006,000
2.65
186,342,000
4.03
Shipowners
23,600,000
2.14
247,342,000
6.20
300,273,000
6.50
American
13,900,000
1.26
114,798,000
2.88
58,600,000
1.27
Total
10
1,104,000,000
3,992,570,000
4,622,894,000
Standard & Poors Ratings of P&I Clubs
Insurance Year
2011
2012
2013
2014
2015
Gard
A+
A+
A+
Britannia
North of England
Standard
Skuld
UK Club
BBB
BBB
A-
A-
Swedish Club
BBB
BBB+
BBB+
BBB+
BBB+
Japan Club
BBB
BBB
BBB+
BBB+
BBB+
West of England
BBB
BB
BBB
BBB
BBB+
London Club
BBB
BBB
BBB
BBB
BBB
BB
BB+
BBB
BBB
BBB
Shipowners
Steamship
American Club
11
Average Expense Ratios (AER)

The AER was introduced in 1998 as a means of comparing the administration costs of the mutual P&I Associations under the terms of their
exemption from the E.U. Competition Directive. The Clubs are only obliged to report their five-year AER and most do not show their annual
expense ratio. The below figures are all five-year averages.
2011
2012
2013
2014
2015
American Club
16.50%
18.30%
19.30%
19.30%
21.60%
Shipowners
19.00%
20.00%
20.00%
18.00%
20.00%
West of England
13.66%
14.75%
15.43%
14.24%
14.86%
Swedish
11.60%
13.00%
13.30%
12.10%
13.00%
Skuld
12.10%
12.40%
12.30%
12.30%
12.90%
North of England
11.90%
12.60%
13.10%
12.50%
12.40%
Steamship
12.00%
12.30%
12.40%
11.30%
11.80%
Gard
12.00%
13.00%
14.10%
11.30%
11.40%
Standard
13.30%
13.40%
13.20%
10.90%
11.40%
UK Club
9.16%
9.46%
9.47%
9.35%
9.66%
London Club
8.70%
9.40%
9.63%
8.36%
8.78%
Britannia
8.09%
8.49%
8.49%
8.03%
8.43%
Japan Club
6.27%
6.18%
5.69%
5.73%
5.25%
10.95%
12.56%
12.80%
11.80%
12.42%
Average
12
Japan
American
London
North
Britannia
UK
Standard
West*
Steamship
Swedish
Gard
Skuld
Shipowners
General Increases
2008
10
7.5
20
15
15
15
15
17.5
23.8
17.5
17.5
15
20
2009
15
15
10
15
17.5
19
15
12.5
12.5
17.5
15
29
27.5
2010
2.5
12.5
2011
2.5
3.5
10
2012
2013
8.5
5***
7.5
7.5
7.5
7.5
7.5
16.5
15
12.5
10
2014
8.5**
5***
7.5
10
7.5
12.5
10
2.5
7.5
10
10
7.5
2015
2.5
0***
2.5
2.5
6.5
2.5
4.75
4.5
150
153
153
173
176
188*
188
189
197
203
205
209
227
Total
2008/2015
Average 185
Applies to premium net of Group Excess Loss Reinsurance costs
** Estimated
*** Includes the increase in Group Excess Loss Reinsurance costs
The total shows the cumulative increase based on 2007 premium of 100.
13
Supplementary Call Record
0/0
25/25
0/0
0/0
0/0
0/0
0/0
20/35
2006
0/20
30/30
25/20
30/60
40/89
0/0
25/25
0/0
0/0
0/12.5
0/35
0/20
20/40
2007
0/30
30/30
25/25
30/30
40/89
0/0
10/10
0/0
0/0
0/14
0/35
0/25
20/55
2008
0/25
40/40
25/25
30/30
40/75
0/0
10/10
0/0
0/0
0/20
0/0
0/20
20/65
2009
20/20 40/32.50
25/10
40/40
40/40
0/0
10/10
0/0
0/0
0/0
0/0
0/0
30/30
2010
25/25
40/40
25/15
40/50
0/0
0/0
10/10
0/0
0/0
0/0
0/0
0/0
30/30
2011
25/25
40/40
25/20
40/40
0/0
0/0
0/0
0/0
0/0
0/0
0/0 0/-2.50
30/30
2012
0/0
40/40
25/15
40/40
0/0
0/0
0/0
0/0
0/0
0/0
0/0
0/0
30/30
2013
0/0
45/45
25/15
40/40
0/0
0/0
0/0
0/0
0/0
0/0
0/0
0/0
35/35
2014
0/0
45/40
25/15
40/40
0/0
0/0
0/0
0/0
0/0
0/0
0/0
0/0
35/35
2015
0/0
45/45
25/25
40/40
0/0
0/0
0/0
0/0
0/0
0/0
0/0
0/0
35/35
+ For members entered on ETC basis, but Nil for members entered on Advance Call basis
Called above Estimated Total Call
Called below Estimated Total Call
Called full Estimated Total Call
West of
England
40/40
UK
30/30
Swedish
25/20
* Includes Surplus enhancement calls
14
Steamship
40/30
Standard
London
0/20
Skuld
Japan
Shipowners
Gard
2005
North of
England
Britannia
American*
(Original Estimate/Current Estimate)
Freight, Demurrage and Defence Summary
West of
England
12.5
10
15
7.5
7.5
2014
10
10
7.5
10
12.5
10
7.5
7.5
2015
4.5
10
2.5
Swedish
Standard
Skuld
London
Japan
Gard
Steamship
10
North of
England
10
Britannia
2013
American
UK Defence
Club
Shipowners
General Increases
2015 Limits and Deductibles

Club
Standard Limit (US$)
Standard Deductible
American
2,000,000
$5,000, then 25% maximum $50,000
Britannia
10,000,000 (but 2m newbuilding/conversion disputes)
One-third of all costs excess of $5,000
Gard
10,000,000 (but 2m newbuilding/conversion disputes)
25%, minimum $5,000
Japan
Yen 1.5 billion (approx. $12,000,000)
One-third of all costs excess of $1,000
London
7,500,000
25% all costs
North
None (but 250,000 building, purchase, sale disputes)
25%, minimum $10,000 maximum $150,000
Shipowners
5,000,000
First $750 of costs up to $3,000, then 25% maximum

$30,000
Skuld
5,000,000 (but 300,000 building, purchase, sale disputes)
25%, minimum $10,000
Standard
5,000,000
25%, minimum $10,000
Steamship
10,000,000
$5,000, then one third all costs subject overall

maximum $30,000.
Swedish
5,000,000
$12,000, plus 25% of any costs in excess of $250,000
UK
15,000,000
Nil, but no cover for disputes under $10,000
West
10,000,000
$5,000, then 25% maximum $50,000 but $100,000 for

building disputes.
15
Pooling and Reinsurance

Layers of International Group Programme 2015/16
Protection and indemnity
3.1bn
3.08bn
Collective Overspill
Excess of underlying
2.1bn
2.08bn
Third Layer
Excess of underlying
Oil Pollution
1.0bn
1.08bn
Second Layer
90% market share
Second Layer
90% market share
First Layer Hydra

Market share share
First Layer Hydra

Market share share
560m
100m
80m
60m
45m
30m
9m
Upper-Upper Pool reinsured by Hydra
5% ICR
Upper Pool reinsured by Hydra
10% ICR
Lower Pool reinsured by Hydra

Lower Pool
Individual Club Retention (ICR)
Single per-vessel retention
*ICR Individual Club retention

2014 16 MultiYear Private Placement, 5% share
2015 17 MultiYear Private Placement, 5% share
16
Excess of Loss Reinsurance Rates

4.0
3.5
3.0
2.5
2.0
1.5
Dirty Tanker
1.0
Clean Tanker
0.5
0.0
Passenger
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Other
The Actual rates US$ per GT are:

Year
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
2015/16
Tankers (Dirty)
0.6799
0.6797
0.7300
0.8079
0.7554
0.7038
0.6515
0.7565
0.7963
0.7317
Tankers (Clean)
0.3201
0.3187
0.3498
0.3667
0.3335
0.3055
0.2798
0.3245
0.3415
0.3138
Dry Cargo
0.2851
0.2837
0.3196
0.3695
0.3867
0.3709
0.3561
0.4942
0.5203
0.4888
Passengers
0.8006
1.3714
1.4985
1.6026
1.5654
1.4780
1.3992
3.1493
3.7791
3.7791
Estimated Cost of Notified Pool Claims

467
500
386.9
400
100
on historical thresholds.
Estimates in USD millions as at February 2015
289.6
122.9
$9m and the Pool limit at $80m. The table

show the total cost of Pool claims based
250.6
266.7
200
179.6
For 2015, the Club retention remained at
327
300
0
2007 2008 2009 2010 2011 2012 2013 2014
17
Current International Group Issues

Maritime Labour Convention 2006
Sanctions
All Clubs in the International Group have incorporated provisions
New sanctions legislation, particularly involving Russia and the
in their rules to extend cover to repatriation costs following
Ukraine,resulted in increasing complexity for shipowners and their
abandonment and in addition, all flag states currently accept Club
insurers, and kept the International Group busy throughout 2014.
certificates of entry as evidence of compliance with the financial

security provisions of the MLC.
Sanctions against Iran also continued to feature prominently,

with some progress apparently made towards a resolution of
Amendments to the MLC have recently been approved and will
the concerns surrounding Irans nuclear programme. 2014 saw a
come into force during 2017. These amendments include an
temporary relaxation of a number of sanctions against Iran that
entitlement for seafarers to receive four months wages in the
impacted the shipping and insurance sectors, but the ambiguity
event of abandonment. It has now to be determined whether the
of many of the provisions, especially those of the EU, means
International Group Clubs will be willing to extend the scope of
that Clubs continue to advise considerable caution to members
P&I cover to include unpaid wages in the event of abandonment.
considering trade to Iran.
We understand there is agreement in principle to provide cover,

but this may be limited to amounts within the individual Club
As we go to print, it does appear that sanctions against Iran
retention (currently $9 million). It is also possible that yet another
are likely to be lifted perhaps before the end of 2015, and an
Blue Card scheme will be required from 2017.
invasion of Tehran by the Clubs can be anticipated as they seek to

persuade NITC and IRISL to return to the fold.
Nairobi Wreck Removal Convention 2007

The Convention came into force on 14th April 2015, requiring
Liquefaction of bulk cargoes
vessels over 300GT registered in or using a port in the territory
The Group continued to focus on concerns regarding potential
of a State party to have insurance or other financial security to
liquefaction of certain bulk cargoes. A number of IMO States
meet the Convention liabilities.
have failed to implement and apply the mandatory requirements

established by the International Maritime Solid Bulk Cargoes
The Convention applies to a States Exclusive Economic Zone,
(IMSBC) Code, and some of them are exporting significant
but States have the option to extend the application to their
quantities of bulk cargoes that are prone to liquefaction. The
own territory, including territorial seas. It is surprising that
Group is working closely with Intercargo to address these
many States have not taken this option as most wrecks occur in
concerns at the regulatory level, and with the IMO and individual
territorial waters.
States which mine and export such cargoes.
The Convention does not change any existing limitation rights,
The Group is also leading an industry wide review in relation
and does apply the usual IMO Convention defences of acts of
to ongoing problems concerning the carriage of Direct Reduced
war, natural phenomena, intentional acts of third parties and
Iron (DRI).
negligence of authorities responsible for navigation aids.

The Clubs agreed to issue Blue Cards under a system similar
to that adopted for the CLC and Bunker Convention, but other than
the compulsory insurance and financial security arrangements,
the Convention would not appear to make much difference to
previous liabilities for wreck removal.
18
P&I Club Information
Introduction

T he information contained in this report is not and is not
intended to be a definitive analysis of the Clubs accounts.

In so far as is possible we have homogenised the data to
enable comparison.

C alls and Premiums are the consolidated totals for all classes.

Solvency margins are calculated as the ratio between total
assets and gross outstanding claims.
A ll monetary figures shown are US dollars.

W hilst every effort has been made to ensure that the
information contained in the report is accurate and up-to-date
at the time of printing, this cannot be guaranteed by Tysers.

T he net underwriting statistics express the technical result for
the year and exclude any non-technical investment income.

Operating Expenses include management expenses and
Under no circumstances shall Tysers be responsible or liable

for any loss or damage caused directly or indirectly by the
publication or use of this information.
business acquisition costs.
19
20
Protection & Indemnity Club Reviews

American
22
Britannia
23
Gard
24
Japan
25
London
26
North of England
27
Shipowners
28
Skuld
29
Standard
30
Steamship Mutual
31
Swedish
32
UK
33
West of England
34
21
American
Steamship Owners Mutual
american steamship
Protection & Indemnity Association, Inc.
Tonnage by Vessel Type
10%
Bulkers
2%
Tankers
General Cargo/
Passenger/Container
Tugs/Barges/Small
craft
american
steamship
Managers
SCB Inc
(Eagle Ocean Management LLC)
48%
40%
Gross Tonnage
Owned
13,900,000
Chartered
Tonnage by Area
Free reserves
7%
Europe
North America
23%
Asia
Other
1,150,000
60%
10%
2015
58,600,000
2014
57,344,000
2013
54,229,000
2012
60,219,000
2011
63,612,000
Standard & Poors Rating
Year
Calls/Premium
2015
2014
2013
2012
2011
114,798
107,959
112,126
111,955
114,631
Reinsurance Cost
20,553
18,581
18,585
16,283
9,362
Net Claims (incurred)
65,962
65,064
83,265
72,986
69,236
Operating Expenses
34,795
35,250
31,995
33,045
34,691
(6,512)
(10.936)
(21,719)
(10,359)
1,342
Gross Outstanding Claims
Net Underwriting Result
228,457
225,545
263,563
261,902
249,892
Total Assets
326,897
328,712
359,110
358,048
343,067
Average Expense Ratio
21.60%
19.30%
19.30%
18.30%
16.50%
1.43
1.46
1.36
1.37
1.37
$4.22
$3.43
$3.61
$3.74
$4.13
Solvency Margin
Reserves/GT Ratio
The Managers report that the Club made solid progress in 2014 and
The Club also mentions that its Managers fixed premium P&I
experienced many positive developments during a characteristically
facility, Eagle Ocean Marine, has grown market footprint with solid
busy year. We have looked hard at the Annual Report to find these
profitability. Eagle Ocean Marine, has grown market footprint with
positive developments but all we can find is an underwriting deficit of
solid profitability. Eagle Ocean now offers a limit of $500 million, with
$6.5m (which is a big improvement on the previous three years) and an
the Club writing a 20% share of the first $25 million, and will accept
investment return of 4% which resulted in an overall surplus for the year
vessels up to 25,000GT. Perhaps in response to criticism from other
of just over $1 million. The Clubs Average Expense Ratio has risen to
parts of the International Group, the Club does give over one page of its
21.6% maintaining their position at the top of the league.
Annual Report to extolling the virtues of mutuality. It states that the not-
There is only a passing reference to tonnage and premium suffering

a reduction over the 2015 renewal, but the Club has confirmed that
owned tonnage reduced by nearly 17% from 16.7m last year to 13.9m
as at 20th February 2015, the lowest level since 2009.
On the claims performance, the year started badly with the Club suffering
one of its largest ever claims, an oil spill in Texas, but thereafter the year
developed favourably. There were only seven claims which exceeded
$1 million. These were mainly collision cases, and both cargo and crew
claims were down on prior years, which the Club attributes to the
members growing implementation of its loss prevention initiatives.
22
for-profit principle permits flexible insurance pricing when shipowner

earnings are depressed (strange as the Club has charged a cumulative
general increase of 35% over the last five years), that the mutual system
offers an unsurpassed service ethic and that the exceptional strength
of the International Groups collective reinsurances provides an
overarching canopy of unmatched security.
The Club thus concludes that the uniqueness of the mutual club ethos
confers singular benefits on the maritime community. So why is it involved
in a fixed market facility which is willing to accept vessels up to 25,000GT?
All figures $000
BBB
The Britannia Steam Ship

Britannia
steam shipLimited
Insurance
Association
Bulkers/OBO
6%
11%
Tankers (Crude)
Managers
35%
Tindall Riley (Britannia) Limited
Containers
Gross Tonnage
Tankers (Other)
Britannia
steam ship
Cargo/Other
31%
Owned
17%
109,000,000
Chartered
27,000,000
Free reserves
Tonnage by Area
6%
2%
Asia
Scandinavia
24%
Europe
51%
Americas
Other
2015
371,267,000*
2014
352,998,000*
2013
326,817,000*
2012
290,677,000*
2011
274,908,000*
17%
Year
2015
2014
2013
2012
2011
269,726
284,167
294,057
281,772
298,482
73,191
74,866
66,820
63,681
74,468
Net Claims (incurred)*
156,241
203,516
200,594
209,634
201,818
Operating Expenses*
24,963
26,811
29,317
29,389
27,877
Calls/Premium*
Reinsurance Cost*
Net Underwriting Result*
15,331
(21,026)
(2,674)
(20,932)
(5,681)
Gross Outstanding Claims*
1,093,595
1,122,485
1,147,253
1,010,461
903,840
Total Assets*
1,489,236
1,499,487
1,499,103
1,326,366
1,203,366
8.43%
8.03%
8.49%
8.49%
8.09%
Average Expense Ratio*

Solvency Margin*
1.36
1.34
1.31
1.31
1.33
Reserves/GT Ratio
$5.03
$4.37
$3.96
$4.15
$4.41
*Excludes Boudicca
Chairman Nigel Palmer reports that 2014 has been a frustrating year
The Clubs owned tonnage remained static at 109 million, but
for shipowners, with the optimism at the start of the year proving
chartered tonnage grew by 4m GT.
unfounded due to lower than expected demand. He states that the

only reason to smile was the low price of bunkers but we imagine
the members will also be happy with a good set of figures from the
Club. 2014 was a quiet year for claims, with claims under $1 million
down 18% on 2013 and only 15 claims totaling $59.3m over $1 million
compared to 33 claims in 2013 totaling $107.2m. Just one claim hit
the Pool, and total estimated retained claims are at their lowest level
since 2010. Not so good was the investment performance, which
produced a paltry return of $4m, but an underwriting surplus of
$15m the first for many years plus a very substantial surplus of
$55m from the Clubs dedicated reinsurer, Boudicca, saw overall free
reserves grow from $472m to $546m
The Chairman, no doubt prompted by Grantley Berkeley (current

Chairman of the International Group), repeats his concerns from last
year over the future wellbeing of the IG, bemoaning the growth of
fixed premium facilities by some Clubs and in particular the fact that
some Clubs are willing to write large vessels on a fixed basis in direct
competition with the IG mutuals, including themselves. Palmer also
expresses his worries at the potential problems for mutuality caused
by diversification of some Clubs into new business areas citing, as an
example, that if P&I rates are being subsidised by profits from other
business lines then P&I call income will be artificially distorted and
will reduce a Clubs contribution to pool claims. The IG system of
pooling claims has served members well and it is essential that the
Palmer does comment that it is important for free reserves not to
broader commercial ambitions of some do not destroy it, to the long-
be excessive and that current levels are well within the capital
term detriment of the majority of shipowners worldwide.
paramiters set by the Committee, and we hope this is a hint of some

good news for the members later this year
All figures $000
*Excluding Boudicca reserves, which

included in Reserves/GT Ratio below
Strong and wise words indeed from this conservative Club.

23
Gard
Gard P&I
(Bermuda) Limited
14%
Tankers & Gas

3%
4%
36%
Managers
Containers
Dry Cargo
Gard
Lingard Limited
18%
Car Carriers
Gross Tonnage
25%
Passenger/Cruise/MOU/Other
Owned
189,000,000
Chartered
Tonnage by Area
Norway
Europe
Free reserves
1%
Asia
9%
26%
19%
Germany
Greece
16%
13%
Americas
57,700,000
2015
968,590,000*
2014
944,123,000*
2013
894,792,000*
2012
825,618,000*
2011
789,695,000*
16%
Africa
A+
Year
Calls/Premium
2015
2014
2013
2012
2011
628,672
585,606
529,973
504,812
463,098
Reinsurance Cost
132,615
141,308
124,994
90,641
86,344
421,976
444,645
422,632
402,132
360,150
Operating Expenses
59,723
43,396
75,191
41,330
43,030
10,364
(43,744)
(92,844)
(29,291)
(26,426)
1,379,308*
1,375,264*
1,344,151*
1,370,242*
1,277,702*
Total Assets
2,745,611*
2,722,301*
2,531,375*
2,494,244*
2,352,141*
11.40%
11.30%
14.10%
13%
12.00%
1.99*
1.98*
1.88*
1.82*
1.84*
$5.12*
$5.06*
$5.13*
$5.08*
$5.46*

Solvency Margin
Reserves/GT Ratio
Note: items marked * are Group figures and include all business lines, not just P&I.
Chairman Bengt Hermelin is pleased to report yet another strong
The Club has now returned a total of $187 million to members over
performance for the Gard group.
the last six years in a clear signal that diversification can work if
The net combined ratio for Gard as a whole was 88%, before
allowance for pension liabilities of $25m and a reduction in the
The Chairman concludes his report with the comment that there
deferred P&I call for 2014 of $37 million. The ratio for P&I alone was
can be no doubt that, by focusing on the principles of mutuality,
98% after the return of premium. As a result, the Group free reserves
there is a genuine alignment of interests across the membership,
grew by $25 million to $969 million.
clients, management and staff which forms a strong foundation for
It is no surprise that the 2015 renewal saw the Clubs highest net
tonnage increase for some years, and while some commentators have
questioned the high level of Gards release calls (5% for 2013, 15% for
2014 and 20% for 2015) this would appear to be somewhat hypothetical
as we cannot imagine many or any members thinking of leaving.
24
done properly.
the business, which looks like a swipe at other Clubs who question
whether diversification is in the interests of the International Group
We expect more of the same in 2015, and a zero general increase.
All figures $000
Bulkers/OBO
The Japan Ship Owners Mutual

Japan & Indemnity Association
Protection
Bulk carriers
Tankers
Car Carriers
Japan
Container Ships
9%
8%
Managers
10%
Self-Managed
59%
14%
Gross Tonnage
General Cargo/Other
Owned
93,400,000
Chartered
Tonnage by Registry
Panama
Free reserves
6%
2%
15%
Others
Japan
Hong Kong
61%
16%
11,800,000
Liberia
2015
172,369,000
2014
156,012,000
2013
157,546,000
2012
166,949,000
2011
157,827,000
Year
2015
2014
2013
2012
2011
233,096
237,738
244,631
251,773
280,927
55,257
56,264
44,545
46,228
49,652
155,635
168,548
175,893
180,390
183,179
Operating Expenses
21,488
22,775
22,574
26,498
25,819
Calls/Premium
Reinsurance Cost
716
(9,849)
1,619
(1,343)
22,277
347,216
391,879
367,927
373,358
359,429
Total Assets
557,348
561,647
560,360
557,471
534,169
5.25%
5.73%
5.69%
6.18%
6.27%
1.61
1.43
1.52
1.49
1.49
$1.85
$1.70
$1.71
$1.86
$1.72

Solvency Margin
Reserves/GT Ratio
New Chairman Junichiro Ikeda reports that the P&I climate generally
aim of which is to pursue sustainable growth of our entered tonnage
appears to be one of improving stability and the Japan club had a solid
by obtaining new good quality entries, recapturing vessels which
year with a technical result around breakeven on both ocean-going
have left us, strengthening our domestic business foundation and
vessels and its Naiko Class (coastal trade). There were no Pool claims,
expanding overseas to target ship owners in the Asia region via our
and net claims were the lowest for five years. Both Ikeda and Director
Singapore branch. The plan also involves the implementation of a
General Yoshikazu Minagawa feel the Clubs positive claims trend
comprehensive risk management system and consideration of a move
is due to a large extent to its increased loss prevention activities, in
into less traditional areas of marine risk.
particular seminars and publications which Minigawa-san feels has

improved the Clubs reputation with its members.
All figures $000
BBB+
Owned mutual tonnage grew by just over 1 million GT in the face of

increased competition from other Clubs which, we have to say, are
An investment return of 2.65%, helped by US$ investments, produced
some way ahead of the Japan Club in terms of service, loss prevention
a very useful dollar profit of US$43 million and, after tax, the Clubs
and marketing and whose free reserves per owned GT are more than
overall surplus was $31 million.2014 saw the Club achieve its target
double those of Japans $1.85.
of free reserves exceeding net premium, while from 2015 the Club has
started a new three-year plan called JPIs CHANGE Phase II, the
25
London Steamship Owners Mutual

London
Steamship Ltd
Insurance
Association
Bulkers
2%
16%
LNG/LPG & Tankers
Managers
Container
LondonCargo
Steamship
56%
26%
A Bilbrough & Co Ltd

Gross Tonnage
Owned
43,800,000
Chartered
Tonnage by Area
S. Europe
Free reserves
4%
19%
Far East
43%
N. Europe
Other
7,500,000
34%
2015
157,414,000
2014
160,644,000
2013
154,029,000
2012
144,669,000
2011
145,070,000
Year
2015
2014
2013
2012
2011
111,290
106,895
101,951
109,190
113,224
24,445
20,754
22,175
21,216
22,549
104,277
92,956
82,691
93,338
101,118
Operating Expenses
12,483
11,921
11,483
$11,367
11,021
Calls/Premium
Reinsurance Cost
(29,915)
(18,736)
(14,398)
(16,731)
(21,464)
346,993
322,827
357,279
418,021
434,846
Total Assets
517,374
492,489
521,630
569,078
593,142
8.78%
8.36%
9.63%
9.40%
8.70%
1.49
1.53
1.46
1.36
1.36
$3.59
$3.71
$3.72
$3.53
$3.82

Solvency Margin
Reserves/GT Ratio
2014 was not a great year for the London Club. The underwriting loss of
This strategy has fortunately worked well in recent years and helped
$30 million was the highest since 2008 and, while an investment return
cover underwriting losses totaling over $100 million during the last five
of $28m helped steady the ship, even this included a convenient $9m
years.
from the revaluation of the Clubs London office. The overall deficit
was thus $3.2m. Owned tonnage remained pretty static, although the
relatively new chartered tonnage continues to grow.
CEO Ian Gooch has for some time accepted that it is essential for the
Club to improve its technical performance but premium increases
are being suppressed by the continuing effect of churn which, as we
Chairman John Lyras reports that 2014 saw an unusual and challenging
mentioned last year, is probably a bigger issue for the London Club
run of expensive claims. There were 14 claims over $1 million and the
than others given its small market share. Gooch confesses that profits
three largest involved dock damage (FFO) incidents. Two of these hit the
from the fixed-premium charterers entries are essential to subsidise
Pool. Net incurred claims totaled $104 million, compared to an average
the mutual book, and regards growth in this area as an important
for the prior three years of just under $90 million.
strategic objective.
Excluding the property revaluation windfall, investments produced
For this conservative Club, diversification means nothing more than trying
a healthy return of 5.5% ($18.8 million). The Club takes the view that a
to increase the spread of risk in terms of geography and tonnage. It accepts
well-diversified portfolio containing some exposure to risk assets
that it cannot continue with its current reliance on 40,000GT bulkers in
will generate superior returns in all but the most extreme years, and
Greece and the Far East and must attract a much wider range of tonnage
its current asset allocation includes close to 25% in equities.
from new areas, as well as continuing to grow its profitable charterers

book. The problem is to convince ship owners that the Club is a viable
alternative to the larger and stronger Clubs in the International Group.
26
All figures $000
BBB
The North of England P&I

The North
of England
Association
Limited
7%
Bulkers
8%
Tankers
Containers
39%
19%
Managers
North Insurance Management Ltd
Car Carriers
The North
of England
Other
Gross Tonnage
27%
Owned
127,000,000
Chartered
Tonnage by Area
Asia Pacific
Free reserves
1%
7%
Europe
6%
11%
40%
Middle East
Americas
Scandinavia
43,000,000
35%
2015
338,109,000
2014
312,274,000
2013
312,236,000
2012
314,013,000
2011
312,434,000
Others
Year
2015*
2014
2013
2012
2011
Calls/Premium
526,196
383,534
365,347
346,348
314,243
Reinsurance Cost
152,509
77,885
70,788
55,432
59,738
305,808
231,627
253,512
246,420
155,956
Operating Expenses
74,497
53,175
51,921
52,681
44,684
(6,618)
20,847
(10,874)
(8,185)
53,865
1,069,483
964,222
880,655
814,450
696,008
Total Assets
1,622,621
1,361,357
1,249,306
1,167,710
1,030,154
12.40%
12.50%
13.10%
12.60%
11.90%
1.52
1.41
1.42
1.43
1.48
$2.66
$2.40
$2.46
$2.55
$2.98

Solvency Margin
Reserves/GT Ratio
All figures $000
*2015 includes Sunderland Marine.

Never before has a Geordie been heard to compliment someone
claims over $500,000 indicates that the most common causes relate to
from Sunderland, but North must be so grateful that the Sunderland
poor operational practices, with procedures either being unsuitable or
Marine purchase has saved the day and turned a poor year into an
not properly implemented. As a result, the Club will be concentrating on
acceptable one.
loss prevention measures including its Member Review Programme.
Norths P&I figures show an underwriting loss of $28.3 million, while the
Owned tonnage fell by 3 million GT to 127 million and chartered
benefit of an investment gain of $31.9 million (including a handy $6.9m
tonnage dropped by 14%, which the Club attributes to the tough
from a revaluation of the Clubs Newcastle property) was reduced by a
stance it took with members with poor claims records.
further pension provision of $19.1m.The overall loss of $15.5m would have

pushed free reserves below $300 million and set a few alarm bells ringing,
but thankfully Sunderland Marine came in with a $41.4 million surplus to
turn the loss into a $26 million surplus for the year.
The Club did have its best investment performance for some years,
returning 4.29% ($25 million) but obviously the main success has been
the acquisition of Sunderland Marine. As the Chairman states, the
acquisition is a major benefit for the mutual membership, providing
Chairman Pratap Shirke describes 2014 as an interesting and busy
us with both a significant financial boost at 20 February, but also
year for North with a number of challenges and positive developments.
with a diversification platform, without incurring the significant
The underwriting result is referred to as difficult perhaps an
start-up investment costs normally associated with this level of
understatement for a year when the Club suffered over 50 claims in
diversification. A nice little dig at the Standard and Skuld Clubs.
excess of $1 million, compared to 30 in the previous year. Claims on

container vessels appear to have risen substantially, and a review of all
27
The Shipowners Mutual Protection &

Shipowners
mutual protection
Indemnity
Association
(Luxembourg)
4%
Harbour
5%
Barges
29%
5%
Fishing
Managers
Ferries
The Shipowners Protection Ltd

15%
21%
Gross Tonnage
8%
Dry
13%
Owned
Tankers
Chartered
Yachts
8%
Tonnage by Area
N/A
Free reserves
17%
2015
300,273,000
2014
298,555,000
2013
275,633,000
S.E Asia & Far East
2012
234,760,000
Australia/NZ & Pacific
2011
187,914,000
12%
Europe
Americas
12%
4%
47%
Africa/Rest of World
Middle East & India
Year
2015
2014
2013
2012
2011
247,342
243,715
221,925
209,689
196,815
36,243
30,664
21,795
19,927
22,998
145,493
158,462
146,871
118,172
107,150
Operating Expenses
54,168
52,255
44,321
43,030
40,510
Calls/Premium
Reinsurance Cost
11,438
2,334
8,938
28,560
26,157
390,177
414,065
384,939
317,177
316,965
Total Assets
764,253
779,090
719,969
603,184
552,268
20%
18%
20%
20%
19 %
Solvency Margin
1.96
1.88
1.87
1.90
1.74
$12.74
$12.65
$12.57
$11.85
$10.57
Reserves/GT Ratio
In his first report as Chairman, Philip Orme advises that the Clubs
knock provisions. Increased exposure should mean higher premium
guiding principle remains underwriting prudence, so he was pleased
but earnings are low and owners will argue they cannot afford higher
to see an underwriting surplus of $11.4m producing a combined ratio
premiums. Having suffered two serious offshore property claims in 2014,
of 94.6%. 2014 appears to have been a comparatively quiet year for
the Club admits it will need to monitor these developments carefully.
the Club. It did pull out of the US fishing business and also had to
withdraw from the Canadian yacht market following the closure of its
Vancouver office. This resulted in a loss of 1,300 vessels but probably
improves the overall profile of the Club. More disappointing was the
loss of a book of European inland vessels although we imagine this
moved elsewhere at very keen rates.
Reassuringly, the Club saw growth in all other sectors so overall the
renewed tonnage was virtually unchanged from the previous year. The
offshore sector has remained very strong, although the Club bemoans
the refusal of the International Group to allow accommodation vessels
to benefit from the Groups reinsurances. The fall in oil process has
also put pressure on owners involved in seismic and survey work,
with overcapacity putting pressure on these owners to accept more
onerous contractual conditions in place of the traditional knock for
28
23,578,000
Overall, 2014 saw a small reduction in claims frequency but, in pure

incurred values, the cost of claims rose by 14% on 2013. This was due
mainly to two claims in excess of $7m, the largest being the grounding
of the container vessel Yusuf Cepnioglu off Mykonos, Greece.
Perhaps this serves as a warning as the Club seeks to attract larger
tonnage? There were six further claims excess of $1m, but crew,
passenger and cargo claims were down.
The only real downside to the year was an investment loss of $11m,
although this was covered by the underwriting surplus. The Club
remains in a very solid position and is, by far, the market leader for
small vessels. Last year, we did raise some service issues but we are
pleased to report these were swiftly resolved and service levels have
since been excellent. We now just want the Club to stick to what it
knows best small vessels.
All figures $000
Shipowners
Offshore mutual protection
Assuranceforeningen
Skuld
Assuranceforeningen
Skuld
Tankers
11%
6%
Bulkers
Container
38%
11%
Managers
Self-Managed
General Cargo
Assuranceforeningen
Skuld
Other
Gross Tonnage
34%
Owned
83,000,000
Chartered
Tonnage by Area
6%
Europe
Free reserves
4%
28%
Far East
Nordic
26%
Americas
Other
Not advised
36%
2015
347,685,000
2014
334,548,000
2013
308,425,000
2012
291,429,000
2011
266,436,000
Year
Calls/Premium
Reinsurance Cost
Operating Expenses
2015*
2014*
2013*
2012
2011
411,246
379,391
317,936
299,971
272,429
63,622
56,557
40,244
38,482
32,312
259,057
245,554
212,167
193,722
165,073
87,781
73,321
64,556
56,109
44,436
786
3,959
969
11,658
30,608
555,116
523,230
490,326
531,434
501,481
Total Assets
903,704
855,985
757,939
722,709
671,148
12.90%
12.30%
12.30%
12.40%
12.10%
1.63
1.64
1.55
1.36
1.34
$4.19
$4.18
$4.08
$4.17
$4.22
Solvency Margin
Reserves/GT Ratio
All figures $000
Note: For years marked * all figures are Group figures including all business lines, not just P&I.
It looks like new CEO Stale Hansen has had his PR team working
Interestingly, there is no mention this year of the Clubs previously
overtime to come up with a People at the forefront theme based
stated goal to reach $500 million premium in 2015. We assume
on the Skuld ABCD value. We shall leave those of you bold, caring
the Club accepts this cannot now be achieved, with last year only
and dedicated enough to work out accurately what the ABCD stands
reaching $411m.
for as we do not have the space or enthusiasm to repeat it all here.
Chairman Klaus Kjaerulff states that the P&I market is going
Perhaps a lot of time is given over to staff details and statistics because
through challenging times. Against a background of two very
the 2014 financials are somewhat bland and Hansen describes the year
benign and profitable years for the International Group, we were
as no better than respectable. The combined ratio was a shade below
very keen for him to elaborate on this rather strange comment but,
100% with premium growing by 8% due entirely to an increase in the
alas, there is no explanation and Kjaerulff instead goes back to the
Clubs commercial lines of business. A net investment return of 1.9%
ABCDs No matter where in the world I go, if I am in a Skuld office,
helped push overall free reserves up by $13m.
I instantly recognize the values that Skuld personnel live out in their
Owned tonnage grew by 3m to 83m and, as the table above shows, free
reserves per GT have remained very constant over the last five years
at around the $4.20 mark. We rather like this, as $4 per ton looks to be a
very comfortable number and more than enough for ongoing stability.
day-to-day work: the Skuld ABCD. To be frank, Mr Chairman, we

think our readers would have been more interested to learn how the
Club will deal with its continuing churn problem and how it will
make its commercial lines profitable.
29
the standard
The Standard
Club Ltd
2%
14%
Tankers
Cargo/Container
31%
5%
Managers
Bulkers
Passenger & Ferries
the standard
Offshore
Charles Taylor & Co (Bermuda)
23%
Tonnage by Area
Europe
Asia
USA
Gross Tonnage
25%
Other
3%
42%
9%
Rest of World
Canada
27%
UK
111,500,000
Chartered
23,500,000
Free reserves
6%
13%
Owned
2015
380,300,000
2014
368,500,000
2013
362,600,000
2012
352,600,000
2011
349,700,000
Year
2015
2014
2013
2012
2011
354,000
336,100
294,100
286,200
278,100
92,000
82,900
62,900
65,500
68,200
233,800
230,900
244,700
240,900
170,800
Operating Expenses
28,600
26,500
26,100
23,900
21,100
Calls/Premium
Reinsurance Cost
(400)
(4,200)
(39,600)
(44,100)
18,000
1,000,400
986,900
1,005,400
860,700
660,300
Total Assets
1,449,600
1,395,800
1,429,900
1,261,600
1,049,900
11.40%
10.90%
13.20%
13.40%
13.30%
1.45
1.41
1.42
1.47
1.59
$3.41
$3.40
$3.45
$3.76
$4.10

Solvency Margin
Reserves/GT Ratio
Chairman Rod Jones regards 2014 as a positive year for the Club,
The Club has developed various additional covers in recent years
making it an even stronger market-leading player in an increasingly
and 2015 saw the start of its Lloyds syndicate, writing hull, marine
competitive environment. It looks to us that the year was actually
and energy liability, and physical damage, D&O, E&O and cargo. The
rather boring, with the highlight being a breakeven technical result
Clubs Asia base also started a War Risks mutual for Singapore-based
after losses totalling for the previous three years of $88 million. An
operators. The board will continue to look at opportunities to extend
investment return of 1.8% pushed free reserves up by $12 million to
the range of products offered and feels the demand for additional
$380 million. Owned tonnage rose by 3 million GT.
covers demonstrates members desire for club-style service for
While Jones feels the Club is in a strong position, he is worried that

the state of the shipping market overcapacity and depressed rates
covers beyond poolable P&I cover, as well as being positive for the
financial strength of the Club.
will force ship operators to look to expand into new unfamiliar trades
The Chairman concludes: My fellow board directors and I are keenly
and geographies and could lead to a reduction in maintenance and
aware of the need for the IG to work constructively together, but we
training budgets. With the shortage of experienced crew also an
also believe that no aspect of the IG should be immune to challenge.
on-going problem, Jones states that the Club is pessimistic about the
The board is wholeheartedly supportive and committed to the IG,
outlook for the operating quality of the world fleet, and the resulting
but we will continue to encourage our partners in the IG to look for
claims environment. This sounds like a clear warning there will be a
continuing improvement in the way that it operates. This sounds
general increase at the 2016 renewal.
like a degree of frustration at the attitude of the more conservative

Clubs.
30
All figures $000
The Steamship Mutual Underwriting

steamship
mutual Ltd
Association
(Bermuda)
Bulkers
Tankers
6%
3%
12%
Managers
41%
Container
Cruise/Ferry
steamship
mutual
General Cargo
Gross Tonnage
24%
Other
Tonnage by Area
10%
Europe
40%
15%
Owned
74,300,000
Chartered
46,000,000
Free reserves
6%
Far East
North America
Steamship Mutual Management

(Bermuda) Limited
14%
Latin America
Middle East/India
29%
2015
376,187,000
2014
301,199,000
2013
286,207,000
2012
295,838,000
2011
303,307,000
Year
2015
2014
2013
2012
2011
365,341
345,731
315,265
329,646
316,054
69,002
61,169
44,323
51,470
48,543
187,614
232,450
266,261
274,194
205,983
Operating Expenses
45,421
42,823
38,456
44,922
40,417
Calls/Premium
Reinsurance Cost
63,304
9,289
(33,775)
(40,940)
21,111
1,024,708
1,205,156
1,281,692
944,222
714,962
Total Assets
1,445,909
1,533,031
1,633,952
1,276,622
1,051,945
11.8%
11.3%
12.40%
12.30%
12.00%
1.41
1.27
1.27
1.35
1.47
$5.06
$4.38
$4.38
$4.73
$5.25

Solvency Margin
Reserves/GT Ratio
In his final statement as Chairman, Heinrich Schoeller sports a
stability over growth in tonnage. A measured approach to growth,
broad smile as he reports on a wonderful year for the Club, with the
together with a rigorous assessment of risk selection... has been a
operating performance one of the strongest in the Clubs history.
major contributor to the results we have seen this year.
A whopping $64 million underwriting surplus plus an investment
Owned tonnage rose by over 5 million to 74.3 million GT, and chartered
return of $12 million (1.6%) have pushed free reserves up by 25% to
tonnage was also up slightly. New members include blue chip names
$376 million, or $5.06 per owned GT which puts them on a par with
such as MSC, Peter Doehle and Cargill, no doubt attracted by the
the big guns like Gard and Britannia. We do like the fact the Clubs
Clubs climb up Tysers league tables.
Managers have been very modest about these results, accepting that
there is an element of luck involved in avoiding large claims.
All figures $000
The Clubs investment policy remains one of the most conservative

in the International Group, with only 6% held in equities, and the total
Claims were down 13.4% on 2013, and claims within the Club retention
return of just under $12 million includes nearly $5 million relating to
of $9 million were 17.9% down on 2013 and were significantly lower than
the revaluation of the Clubs London property. It is therefore vital
any year in recent memory. There was one claim which hit the Pool. In
for the Club to achieve a positive underwriting result and the 78.6%
addition, back years saw a considerable improvement. The Chairman
combined ratio achieved in 2014 has helped improve the three year
does accept that the incidence of big claims is largely random, but also
average to 95.9% down from 108% last year. As the target is 100%,
feels the Board should take some of the credit for the good performance
we wonder whether we can expect the Members to benefit from the
as it has consistently required the Managers to prioritise financial
excellent 2014 year by means of a return of premium?
31
swedish club
The Swedish
Club
3%
Container
1%
Tankers
Bulkers/General Cargo
35%
Managers
44%
Self-Managed
Passenger
swedishOther
club
Gross Tonnage
17%
Owned
41,500,000
Chartered
20,500,000
Free reserves*
Tonnage by Area
Europe
Asia Pacific
45%
55%
2015
186,342,000
2014
167,952,000
2013
150,971,000
2012
141,900,000
2011
151,200,000

BBB+
Year
2015
2014
2013
2012
2011
106,006
99,646
91,742
91,356
85,280
Reinsurance Cost
27,139
32,035
24,354
19,038
16,290
59,689
60,154
71,276
71,014
52,088
Operating Expenses
15,209
13,825
13,376
12,675
11,644
3,969
(6,368)
(17,264)
(11,371)
5,258
Gross Outstanding Claims*
272,959
318,933
351,349
385,568
224,889
Total Assets*
537,017
547,368
562,829
584,741
425,095
13%
12.10%
13.30%
13%
11.60%
Calls/Premium

Solvency Margin*
Reserves /GT Ratio*
1.97
1.72
1.60
1.52
1.89
$4.49
$4.53
$4.34
$4.13
$4.89
Note: items marked * are Group figures and include all business lines, not just P&I.
Chairman Lennart Simonssons overview concentrates on the
years, but the Club benefited from an absence of large claims and
fragmented state of the shipping markets, with uncertainty the norm
no Pool claims. The Clubs loss prevention efforts continue to focus
it is like gazing into a crystal ball to try and second guess what the
on crewing and assisting owners to implement a sustainable safety
future will bring. However, he does feel the members can be confident
culture throughout their organization, via the Clubs Maritime Resource
that the Club is committed to the strategy of ongoing stability driven by
Management campaign (MRM) and Operations Review (SCORE)
a policy of business as usual and diversification with a purpose.
so has now obtained an A- from A.M. Best. The fact that A.M. Best
years. Across all classes, the net combined ratio was 87% which,
refers to the Clubs good profit for 2013 and an expected good
with an investment return of 1.6% resulted in free reserves rising by
pre-tax profit for 2014 rather confirms our suspicions that the rating
over $18m to $186m. Rhodin feels the good results are a clear sign of
agencies do fail to grasp the essentials of mutuality.
the benefits of diversification, and 2014 saw the introduction of new

covers, including Builders Risks, Kidnap & Ransom and Extended
Charterers Liability.
32
It looks like the Club has given up on securing an A rating from S&P,
M.D. Lars Rhodin is happy to report the best set of results for some
In summary, a good year all round for the Club but we need to see
further considerable growth and a more international presence for
the Club to be a seriously attractive alternative to our top-rated
The P&I book produced an underwriting surplus for the first time since
Clubs. The very recently announced opening of the Clubs London
2011, and owned tonnage grew by over 4m to 41.5m GT, with chartered
office (as recommended in our Report last year) is an excellent step
tonnage also up over 10%. Claims frequency was similar to previous
in the right direction.
All figures $000
* All classes of business
The United Kingdom Mutual Steam Ship

the standard
Assurance
Association (Bermuda) Limited
Tankers/Gas
Bulkers
3%
4%
1%
15%
Managers
38%
Container
Thomas Miller
Passenger/Ferry
the standard
Car Carrier
Gross Tonnage
Owned
39%
Other
98,000,000
Free reserves*
Tonnage by Area
10%
Europe/M.East/Africa
Asia Pacific
Americas
127,000,000
Chartered
38%
52%
2015
449,069,000
2014
430,004,000
2013
394,056,000
2012
386,459,000
2011
378,993,000

A
Year
Calls/Premium
2015
2014
2013
2012
2011
408,059
396,281
360,181
98.7
364,791
Reinsurance Cost
88,969
93,502
73,190
70,685
70,218
289,936
268,906
258,679
243,287
250,428
Operating Expenses
Total Assets
49,522
39,876
41,545
42,239
40,621
(20,368)
(6,003)
(13,233)
4,329
3,524
978,931
1,066,134
1,046,420
1,109,910
1,105,013
1,554,953
1,624,107
1,563,442
1,621,371
1,609,705
9.66%
9.35%
9.47%
9.46%
9.16%

Solvency Margin
Reserves /GT Ratio
1.59
1.52
1.49
1.46
1.46
$3.54*
$3.47*
$3.28*
$3.45*
$3.61*
Chairman Alan Olivier reports that 2014 was a good year for the Club,
operational quality and safety performance being the dominant
with a solid investment return of 5% more than compensating a 104%
underwriting criteria. As a result, it declines around one in four
combined ratio and resulting in free reserves rising by $20m to $548m,
applications for membership.
including $99m hybrid capital. Olivier is perfectly happy with the

underwriting loss given the current soft market conditions, and a five
year average combined ratio of 101% is, he feels, a very creditable
result and amongst the very best in our market, especially as the Club
is still dealing with the aftermath of the 2013 policy year which was
one of the most expensive in the Clubs history.
After twelve months, notified claims for the 2014 policy year were
20% lower than for the 2013 year at the same stage of development
and $20m lower than the average of the previous 10 years. There
were no Pool claims, so the Club continues to benefit from a reduced
contribution to the Pool.
All figures $000
*Excludes 98.7m hybrid capital
The P&I market was taken aback when the Club came out with a 6.5%
general increase at the 2015 renewal, the largest in the International
Group. The increase actually achieved was 3.5% (excluding the impact of
increased deductibles and other changes to terms) so the Club did listen
to the sensible arguments of the quality brokers.
With the continuing improvement in financial performance it is no surprise
Chairmans comment that premium must not be allowed to slip behind
the levels of claims inflation, and must keep moving forwards. The Club
has had a good five years and was easily able to cope with the expensive
2013 policy year. Total free reserves of $4.31 per owned GT are more than
enough, so the Club can afford to be gentler on its members at the 2016
Owned tonnage grew by 3 million to 127 million GT, and chartered
renewal and should bear in mind that some of its main competitors may
tonnage is now very close to 100 million GT, up over 20% on the
well be returning money to its members later in the year.
previous year. The Club states it is seeking controlled growth with

33
The West of England Shipowners Mutual

west of
england
Insurance
Association
(Luxembourg)
2%
Bulkers
11%
2%
Tankers
Containers
Cargo/Reefers
Managers
37%
17%
Self Managed
west of Ferries/Passenger
england
Gross Tonnage
31%
Other
Tonnage by Area
Europe
Asia
Americas
Other
53%
37%
67,500,000
Chartered
20,000,000
Free reserves
6%
4%
Owned
2015
243,692,000
2014
216,196,000
2013
197,421,000
2012
179,356,000
2011
182,664,000
Year
2015
2014
2013
2012
2011
216,798
203,311
195,483
211,551
243,167
40,619
36,369
29,187
33,008
39,831
136,280
133,485
135,168
157,595
204,473
Operating Expenses
35,350
34,854
35,264
36,492
35,532
Calls/Premium
Reinsurance Cost
4,549
(1,397)
(4,136)
(15,544)
(36,669)
598,825
549,484
595,797
671,025
731,343
Total Assets
879,656
810,755
894,939
968,947
981,200
14.86%
14.24%
15.43%
14.75%
13.66%
Solvency Margin
Reserves /GT Ratio
1.47
1.48
1.50
1.44
1.34
$3.61
$3.78
$3.75
$3.55
$3.73
Chairman Matheos Los reports that 2014 was the most satisfying financial
continue this forward momentum by means of the Clubs Enterprise Risk
year for the Club for many years, with the combined ratio of 97.4% and a
Management framework, which identifies key risks, establishes suitable
net investment return of $25m (including $10m from property revaluation),
tolerances for them and then sets controls to ensure the Club is not
pushing free reserves up by 12.7% to a record $243.7 million, an increase
exposed to the potential of unacceptable losses
of over $27 million. The Chairman confirms that this conservative Club is
going to stick to P&I: For several years it has been central to our strategy
to remain a fully focused P&I and FD&D mutual committed primarily
to the provision of excellent claims and advisory services through
our London and regional offices in Hong Kong and Greece. We have
consistently resisted pursuing a policy of diversification into activities
like hull and energy insurance which appear to your Board to be already
oversubscribed and, we believe, will struggle to add value especially if the
capital to maintain stability of calls He acknowledges that pressures

from regulation and growing rating agency attention have led Clubs to
hold levels of capital above traditional levels, and reminds us that a Club
must remain mindful that its capital remains that of its Members and that
excess capital strength, above that necessary to achieve its business
objectives, will be unwelcome. We could not agree more.
risks threaten to erode the Clubs capital base. Los then goes further and
With the continuing improvement in financial performance it is no surprise
suggests that Wests traditional view of the purpose of a P&I Club may
that tonnage has grown, although a year on year rise of over 10 million
actually be reasserting itself more generally in the P&I market, although
owned GT must have exceeded expectations and the Club emphasizes it
we struggle to find the evidence of this.
remains very selective about new business. Interestingly, the Club has
The Clubs technical result is the first positive one for many years and the
seventh consecutive year of improvement. M.D. Peter Spendlove aims to
34
On free reserves, Spendlove comments that a mutual should hold enough
now decided that vessel numbers are a better indicator of exposure and
risk than GT. That is a new one, and the Shipowners Club with its 32,000
vessels (and higher free reserves) may have something to say about it.
All figures $000
BBB+
35
Tyser & Co Limited

Tel: +44 (0)20 3037 8000
Fax: +44 (0)20 3037 8010
Beaufort House
15 St Botolph Street
London
EC3A 7EE
United Kingdom
www.tysers.com
Tyser & Co. Ltd. of Beaufort House, 15 St Botolph Street, London, EC3A 7EE is an Independent Lloyds broker. We are authorised and regulated by the Financial Conduct
Authority (FCA). Our permitted business is arranging general insurance contracts. Our FCA Register number is 308648. These details can be checked on the FCAs Register
by visiting the FCAs website www.fca.org.uk or by contacting the FCA on 0845 606 1234.
36

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International Insurance and Reinsurance Brokers

The P&I Report 2015

P&I Team Contacts

How Will They Spend the Money

P&I Club Information

Summary of 2014/15 Results

Gard P&I (Bermuda) Limited

& Indemnity Association

Standard & Poors Ratings of P&I Clubs

Average Expense Ratios (AER)

T he North of England P&I Association Limited

T he Shipowners Mutual Protection

Freight, Demurrage and Defence Summary

Insurance Association Ltd

The Standard Club Ltd

T he Steamship Mutual Underwriting

Excess of Loss Reinsurance Rates

L ondon Steamship Owners Mutual

& Indemnity Association (Luxembourg)

 T he Japan Ship Owners Mutual Protection

P&I Market Share

Supplementary Call Record

T he Britannia Steam Ship Insurance

International Group 2015 League Tables

Estimated cost of notified Pool claims

Current International Group issues

The Swedish Club

T he United Kingdom Mutual Steam Ship

Assurance Association (Bermuda) Limited

T he West of England Shipowners Mutual

Global expertise With particular strength in the UK,

Protection and Indemnity, FDD, other Marine

Europe, Indian sub-continent, South East Asia, the Far

Liabilities including Contractual and Specialist

East and South America.

Containers and Chassis

competitive pricing. We work with all 13 Clubs in the

Ship Agents Liabilities

Ports and Terminals

Loss of Hire/Trade Disruption

of expertise to put at clients disposal, having worked

Hull & Machinery

previously for International Group P&I Clubs, leading

insurers and other major brokers.

Established market presence Strong relationships

Extensive experience Our team has a unique blend

Reinsurance expertise Our reinsurance clients

range from the London Market to other major marine

underwriting centres, P&I Clubs, fixed premium and

Builders Risks including Related Delay Covers

Kidnap and Ransom

P&I Team Contacts

Direct line: +44 (0)20 3037 8309

Direct line: +44 (0)20 3037 8303

Mobile: +44 (0)7971 501 747

Mobile: +44 (0)7801 553866

40 years P&I experience, mainly as a Senior

Over 20 years a P&I broker, joined Tysers in 2012.

Underwriter and Director with the Steamship Mutual

Direct line: +44 (0)20 3037 8301

Direct line: +44 (0)20 3037 8315

Mobile: +44 (0)7881 265060

Mobile: +44 (0)7971 501 742

Ian joined Tysers from Willis in January 2014, and has

Tysers P&I Report 2015

Tysers P&I Report 2015

T he North of England P&I Association Limited

T he Shipowners Mutual Protection

T he Steamship Mutual Underwriting

L ondon Steamship Owners Mutual

T he Japan Ship Owners Mutual Protection

T he Britannia Steam Ship Insurance

T he United Kingdom Mutual Steam Ship

T he West of England Shipowners Mutual

Protection and Indemnity, FDD, other Marine

b. reserve risk (the risk that the claims reserves established in

c. catastrophe risk (the risk of one or more claims running into

d. market risk (the risk of losses on investments, liquidity risk,

e. counterparty default risk (the risk that a Club is unable to