1

2

ADDITIONAL CURRENT TALKING POINTS:

•Mutual Clubs diversification into non P&I business- good, bad or necessary development to keep the

rating agencies happy?

•Maritime legislation- ever growing burden on ship owners leading to increase risk to P&I insurers. For example:

* Nairobi Convention- Wreck Removal

* IMO SOLAS- Bulk liquid blending prohibited

* Athens Convention- Passenger Liability increases

* LLMC- 50% increase in limit of liability

•World fleet capacity growing with new buildings exceeding scrapping- continued pressure on freight rates.

•Power of Club Letter of Undertaking.

•Shortage of skilled crew members.

•Sharing of statistics between Clubs would this be a useful development!

•Better incentives for ship owners with good records.

•MLC- unpaid crew wages an issue for Clubs to address, but outside of Pooling arrangement!

•Expect downward trend in Release Call percentage to continue.

•What Rules? Hamburg, Hague, Hague-Visby, now Rotterdam Rules.

•IG Club free reserves now exceed USD 4 Billion.

•Trade Sanctions ever increasing problem for owners and insurers alike.

•Container Vessels – Wrongly declared cargo serious ongoing problem – Calcium Hypochlorite for example.

For ship owners and P&I brokers, there are five

seasons in a year!! Spring, Summer, Autumn,

Winter and more importantly the P&I renewal

season. The P&I renewal season can encompass all

the elements of the other four seasons, being the high

and low depressions of P&I renewal negotiations.

The P&I renewal season will soon be upon us and

it is again the time of the year for the annual check-

up of the wellbeing of the P&I insurance market

and this we do, in the form of the 8th Omni P&I

Report on the state of the market for both Mutual

Clubs and Fixed premium facilities, the two distinct

markets.

The International Group of 13 Mutual Clubs is in

all probability going to again prescribe the bitter pill

of general increases, which in turn might lead to more

vessels moving between the clubs.

Let us hope that the benign claims experience of

the clubs results in a corresponding benign general

increase. This coupled with increased profitability

for the year ending 20 February 2014 and club free

reserves now exceeding USD 4 billion, it is not the

time to again burden members with more general

increases?

The number 13 is considered an unlucky number

and whether that ultimately becomes a lesser

number or more probably a greater number within

the IG Clubs remains to be seen.

It seems that the European Commission will

just not go away with the announcement of yet

another review, this time of the Club’s pooling

arrangements (IBER review)

Since our report last year, there has been further

growth in the Fixed P&I market with the notable

addition of Turk P&I Sigorta in 2014.

With so many fixed premium providers it will

inevitably put pressure on premium levels, much

to the benefit of the ship owner.

So to put it very simply, the Mutual market are

likely to be seeking increases in premium/calls,

modest we hope , whereas the Fixed market will

struggle to maintain existing levels of premium and

might have to consider reductions, depending on

record of the ship owner.

IG Group Pool reinsurers are expected to be hit

by the increase in cost of wreck removal of Costa

Concordia and Rena so we must be prepared for an

increase in RI cost, particularly with the final claim

estimate for these two losses appearing to increase

on a daily basis.

It will be interesting to see at the forthcoming

renewal season, how much migration of tonnage

there will be from Mutual to Fixed premium basis,

however, we must remember that this is not an

option for the majority of ship owners.

We hope this Report will assist you in

understanding the P&I Insurance market and

evaluating the results of each club and insurer.

Foreword

3

WHERE SHOULDHE MIGRATE TO?FIXED MUTUAL

4

5

TABLE OF CONTENTS

I. INTRODUCTION 6

Recent developments 6

Maritime Labour Convention 8

Wreck Removal Convention 9

Pool and Re-Insurance 11

Underwriting 12

Claims 14

Movement of Accounts during the 2014 Renewal 16

What Do We See on the Horizon? 18

II. INTERNATIONAL GROUP CLUBS 19

American Club 20

Britannia 22

Gard 24

Japan Club 26

London Club 28

North of England 30

Shipowners’ Club 32

Skuld 34

Standard Club 36

Steamship Mutual 38

Swedish Club 40

UK Club 42

West of England 44

III. OTHER P&I FACILITIES INCLUDING FIXED PREMIUM MARKET 47

British Marine 48

Carina 49

Eagle Ocean Marine 50

Hanseatic P&I 51

Ingosstrakh 52

Lodestar Marine 53

Navigators 54

Osprey 55

RaetsMarine 56

Rosgosstrakh 57

Turk P&I 58

6

INTRODUCTIONINTRODUCTION

TABLE NO. 1 / Investment Results

2014

145676252413212710693620

USD million

1 2 3 4 5 6 7 8 9 10 11 12 13

Sanctions Ukraine & Russia

Recent developments regarding sanctions worldwide are

now focused on the sanctions at the Black Sea Region,

Ukraine and Russia. These sanctions are especially

important for owners and operators trading to these countries.

With regard to financial sanctions in respect of Ukraine, the

designated individuals and entities should be regularly checked.

See our website for a relevant list.

Should an individual or entity be listed, any transaction with

them will be subject to financial sanctions.

With reference to Ukraine, financial restrictions are imposed for

the import into the European Union of goods originating in Crimea

or Sevastopol. In this regard, relevant Circulars that are from time

to time circulated at web sites of P and I Clubs should be regularly

checked for the details of these financial sanctions regarding the

goods originating in Crimea and/or Sevastopol. The circulars may

be found on the P&I clubs web sites. See our web site for examples.

However, there are some exceptions in respect of above

mentioned sanctions imposed for the goods originating in Crimea

and/or Sevastopol: In case a contract has been concluded before

25 June 2014, said contract and its ancillary contracts are allowed

to be executed until 26 September 2014. This time scale can be

extended.

If an individual and/or an entity provides a minimum of 10 days

advance notice to their EU Member State Competent Authority in

respect of the trade of goods which are “preferential origin” status

in accordance with Regulation (EU) No 978/2012 and Regulation

(EU) No 374/2014 or the EU-Ukraine Association Agreement, the

trade of these goods might not be subject to the financial sanctions.

Ukraine also stated that any vessel, regardless of the trading

activity, calling at Crimea and Sevastopol ports are being

determined and listed and those vessels may be arrested or even

confiscated if they then call to a Ukrainian port. Although there is

no such application of the Ukrainian government yet, this issue

should be taken into consideration when fixing vessels for these

ports.

With regard to the details of Russia Sanctions, Council Regulation

(EU) No 833/2014 (“the Russian Sanctions Regulation”) which

targets directly Russia’s state finances, energy and arms sectors

should be checked.

With reference to the financial sanctions in respect of Russia,

the designated individuals and/or entities and transactions which

involve the manufacturing or distributions of arms and related

materials should be regularly checked. See our web site for a

reference the relevant lists.

Should an individual and/or entity or a transaction is listed they

are subject to financial sanctions.

The prohibitions are summarized as follows:

-sale etc. of dual-use goods or technology, to any natural or legal

person, entity or body in Russia or for use in Russia, if those items

are or may be intended, in their entirety or in part, for military use

or for a military end-user;

-the provision of technical assistance or brokering services related

to dual-use goods and technology, to any natural or legal person,

entity or body in Russia or for use in Russia, if the items are or may

be intended, in their entirety or in part, for military use or for a

military end-user;

-the provision of financing or financial assistance related to dual-

use goods and technology, to any natural or legal person, entity or

body or designated banks in Russia or for use in Russia, if the items

are or may be intended, in their entirety or in part, for military use

or for a military end-user.

The abovementioned transactions are exports of certain energy-

related equipment and technology to Russia including:

-line pipe, drill pipe, casing and tubing used in oil or gas drilling,

rock-drilling or earth-boring tools, certain types of pumps, liquid

elevators, mobile drilling derricks, floating or submersible drilling

or production platforms, and other oil and gas drilling related

equipment. A list of CN codes has been published to help exporters

identify restricted items.

Export licenses will be denied if the equipment is provided

under a contractual obligation which was entered into on or after

1 August 2014 and there are reasonable grounds to consider that

the products are destined for projects pertaining to deep water oil

exploration and production, Arctic oil exploration or production, or

shale oil projects in Russia.

Russian and Ukrainian sanctions may be limited or lifted in full

in the near future but recent situation may affect the trading

activities to such areas.

RECENT DEVELOPMENTS

*In this and other graphs 2014 means policy year 2013/2014

2014

7

INTRODUCTIONINTRODUCTION

TABLE NO. 2 / Total Assets

32916182722562493136177985699015335471321811

USD million

TABLE NO. 3 / Free Reserves

2012 2013 2014

60 54 57461 438 472826 895 944167 158 156145 154 161314 312 312234 276 299291 308 335353 362 369296 286 301142 151 168486 494 528179 197 216

USD million

1 2 3 4 5 6 7 8 9 10 11 12 13

1 2 3 4 5 6 7 8 9 10 11 12 13

No 2014

8

INTRODUCTIONINTRODUCTION

TABLE NO. 4 / Free Reserves over GT

Free Reserves USD mEntered Tonnage

(owned) GT mRatio USD

AMERICAN CLUB 57 18 3,24

BRITANNIA 472 108 4,37

GARD 944 187 5,06

JAPAN CLUB 156 92 1,70

LONDON CLUB 161 43 3,71

NORTH OF ENGLAND 312 131 2,38

SHIPOWNERS 299 24 12,67

SKULD 335 75 4,46

STANDARD CLUB 369 105 3,51

STEAMSHIP MUTUAL 301 69 4,38

SWEDISH CLUB 168 37 4,53

UK CLUB 528 124 4,26

WEST OF ENGLAND 216 57 3,78

The MLC that establishes an owner’s obligations towards

the crew has now been in force for a year and at the time

of writing 61 States constituting 80% of the world fleet

has ratified the Convention.

The main points of the Convention was to establish minimum

requirements for the seafarers to work on a ship, as well as

stipulating proper conditions of employment, accommodation and

recreation facility requirements and minimum standards for food,

health, care, welfare and social security.

The Convention contains requirements for compensation

for occupational injury, death and long term disability and

requirement for repatriation of the seafarers in case where they

became abandoned due to the ship-owners insolvency.

For these requirements the Convention required Certificate of

Financial Security, which the P&I Clubs provided, even though

the costs of repatriation due to the ship-owners insolvency, was not

covered by the Club rules.

In April 2014 a meeting was held by the Special Tripartite

Committee established according to the Convention, and at that

meeting it was decided to increase the obligations under the

Convention to also secure payment of wages and outstanding

entitlements for abandoned seafarers for a period up to 4 months.

These obligations are also to be backed by Certificates of

Financial Security. Again, the Clubs have been requested to

consider issuing such certificates, even though the payment

of wages and outstanding entitlements are not covered by the

club rules.

The Boards of the Clubs will now have to decide if they are willing

to extend their Certificates to cover these additional obligations

that currently fall outside Club cover.

The amendments to the Convention are expected to enter into

force in 2017, so there is ample time for the Club Boards to make

their decisions.

That vessels comply with the requirements of the Convention is

controlled by the Flag States, so as part of a Ports State Control,

the inspectors will also check that the minimum requirements of

the MLC are fulfilled.

In the year that has passed since the Convention came into

force, we have been advised that more than 20 vessels have

been detained due to MCL violations. In this respect it should

be remembered that initially the Convention was only in force

in 30 countries, where-as progressively it will cover 61 countries

with more to come. So there are now many more places where the

requirements under the Convention are controlled.

MARITIME LABOUR CONVENTION 2006

9

INTRODUCTIONINTRODUCTION

The Wreck Removal Convention (WRC), which was

agreed at an IMO Conference in Nairobi in 2007, will

enter into force 14 April 2015.

The Convention intends to provide a set of uniform

international rules for the prompt and effective removal of

wrecks located within the Exclusive Economic Zone or 200

NM outside the territorial waters of a state that is party to the

convention. A convention state can also declare to extend the

convention to its own territory.

The convention defines what is a ship and a wreck, as well as a

maritime casualty. It imposes an obligation to remove the wreck

if it poses a hazard to navigation or the marine environment,

or related interests, such as affecting the maritime coastal,

port and estuarine activities, including fisheries activities,

tourist attractions, health of the coastal population including

conservation of marine living recourses and wildlife as well as

offshore and underwater infrastructure.

There is an obligation on the Master and Operator of a vessel

to report to the affected State if a vessel has been involved in

a maritime casualty resulting in a wreck. It is defined what has

to be reported, as well as what the State shall use of criteria for

their evaluation of if the wreck exposes a hazard, and thus can

be ordered removed.

The Convention imposes a rather strict liability on the ship-

owner, only excluding liability if the wreck was caused by “

act of war, hostilities, civil war, or a natural phenomenon of an

exceptional, inevitable and irresistible character”, or was caused

with intent by a 3rd party or, was caused by negligence or

wrongful act of a Government responsible for the maintenance

of lights or other navigational aids. Here it should be noted

that Piracy, is not an exclusion.

The liability under the Convention can be limited according

to the 1976 Limitation Convention. However a number of

nations have excluded wreck removal from the 1976 Limitation

Convention, so the result is that in a number of States the liability

for wreck removal cannot be limited. As an example of this can

be mentioned the Costa Concordia in Italy and the Rena in New

Zealand, where the owners could not limit their liability and

the costs of these wreck removals have run into the hundreds of

millions of USD.

According to the Convention the participating states must

require vessels under their flag, with a tonnage above 300

GT to have compulsory insurance for wreck removal, and the

vessels must have a certificate of appropriate insurance or

other financial security to be issued by the state of the ships

register. The Wreck Removal Convention stipulates a Direct

Action against the insurers, but with the insurers having the

same defences as the ship-owners would have had if he had

been sued first.

In states, that have not excluded wreck removal from limitation

under the1976 Limitation Convention, it means that the state

will have a direct action against the insurer for an amount up to

the limitation amount. When the Limitation amount has been

exhausted no more claims can be brought against the ship-owner

or the insurer.

In states, that have excluded wreck removal from limitation

under the 1976 Limitation Convention, it means that the state

will have a direct action against the insurer for an amount up to

the limitation amount. When the limitation has been exhausted

the state can continue the claim against the ship-owner, who in

turn will then approach his insurer for re-imbursement for claims

up to any applicable limitation amounts under the insurance.

Even though there is a Direct Action provision in the

Convention, we understand that the Clubs will issue the

required certificates, as wreck removal is fully covered under

Clubs rules and as the amount for which there is direct action

- under the insurance certificate - is limited to the limitation

amount under the 1976 Limitation Convention.

WRECK REMOVAL CONVENTION

TABLE NO. 5 / Release Calls

20 20 207,5 10 17,55 15 205 45 4515 15 155 20 200 0 00 0 153 4 85 10 257,5 12,5 2012,5 20 155 15 30

1 2 3 4 5 6 7 8 9 10 11 12 13

Updates will be available on www.omniltd.com.*For West of England, the Release percentage is of the net Advance Call premium, i.e. Advanca Call premium excluding the Group reinsurance cost.

%

10

INTRODUCTIONINTRODUCTION

TABLE NO. 6 / IG Market Reinsurance Structure for 2014/2015 Policy Year

Updates will be available on www.omniltd.com.

5% ICR

10% ICR

FIRST LAYER65% SHARE

HYDRA30% SHARE

UPPER- UPPER POOL - REINSURED BY HYDRA

UPPER POOL - REINSURED BY HYDRA

LOWER POOL- REINSURED BY HYDRA

LOWER POOL

INDIVIDUAL CLUB RETENTION (ICR)

Chartered Entries

P&I & OIL POLLUTION

Multi- Year Fixed Placement. 5% share

80m -

350m - - 350m

- 100m

60m -

45m -

30m -

9m -

INTERNATIONAL GROUP OF P&I ASSOCIATIONS GENERAL EXCESS OF LOSS REINSURANCE CONTRACT STRUCTURE

OWNED AND CHARTERED ENTRIES(INCLUDING OVERSPILL PROTECTION, HYDRA PARTICIPATION, POOLING AND

INDIVIDUAL CLUB RETENTIONS) 12 MONTHS AT NOON GMT 20TH FEBRUARY, 2014

5% ICR

10% ICR

COLLECTIVE OVERSPILLEXCESS OF UNDERLYING

THIRD LAYEREXCESS OF UNDERLYING

SECOND LAYER95% SHARE

SECOND LAYER95% SHARE

FIRST LAYER65% SHARE

FIRST LAYER65% SHARE

HYDRA30% SHARE

HYDRA30% SHARE

UPPER- UPPER POOL - REINSURED BY HYDRA

UPPER POOL - REINSURED BY HYDRA

LOWER POOL- REINSURED BY HYDRA

LOWER POOL

INDIVIDUAL CLUB RETENTION (ICR)

P&I

Single per - vessel retention

Owned Entries

OIL POLLUTION

3.08bn-

2.08bn-

1.08bn-

580m -

80m -

- 1.08bn

- 3.100m

- 100m

- 2.100m

60m -

45m -

30m -

9m -

11

Burdened by the Costa Concordia and the Rena wreck removal

cases in 2011, where the total reserves have now been reported

to be estimated at USD 1.500 Million and USD 450 million

respectively, changes were again made to the IG Clubs Pool arrangement

to lessen the blow of the increases of the reinsurance premiums.

The Pool level for the individual Clubs was retained at USD 9 million,

but the Pool Layer shared by the Club was increased from USD 70

million to USD 80 million.

The Clubs also increased their proportion of the cover by taking a 5%

co-insurance of the layer from USD 80 Million to USD 100 million in

addition to the Pool’s 30% co-insurance of the layer from USD 80 Million

to USD 580 million.

In order to minimize the premium increases the Clubs purchased

a multi-year fixed premium cover for 5% of the layer from USD 100

Million to USD 1.100 million.

The combined effect of these changes to the Pool and the Reinsurances

has lessened the increase of the Reinsurance Premium for Cargo vessels

to approximately 5% and 20% for passenger vessels

The total premium for the Clubs reinsurance program is now more than

USD 650 Million compared to USD 410 million in 2011.

Also it must be borne in mind that as the Pool level has increased from

USD 70 million to USD 80 million. – as well as the additional 5% of

the layer from 80 million to 100 million, a higher proportion of larger

claims will be borne directly by the Clubs, and thus gives room for more

fluctuation in the Clubs own claim results. We are aware, though, that

most Clubs have some kind of reinsurance programs to ease any such

fluctuations.

Finally, the US oil pollution voyage surcharge has been removed

reflecting the continued improvement in the record of the dirty

tanker sector.

POOL AND RE-INSURANCE

INTRODUCTIONINTRODUCTION

TONNAGE CATEGORY USD per GT % CHANGE from 2014

TANKERS CARRYING PERSISTENT OIL AS CARGO 0,7963 5

TANKERS CARRYING NON-PERSISTENT OIL AS CARGO 0,3415 5

DRY CARGO VESSELS 0,5203 5

PASSENGER VESSELS 3,7791 20

TABLE NO. 7 / IG Market reinsurance rates for 2014 policy year

Updates will be available on www.omniltd.com.

12

INTRODUCTIONINTRODUCTION

Although it works in the background, the insurance coverage

provided by P&I Clubs perform a critical role in meeting the

limits of liabilities and providing broad range of covers that

are needed to transport basic needs of consumers, as the vast majority

of goods are shipped by means of vessels.

It lies in today’s underwriting philosophy that generating profit for

Clubs is no longer just producing minimum technical results to be

compensated by income from passive financial investments. The way

to go in recent years is called diversification. This includes buying

managing agencies, forming syndicates at Lloyd’s and introducing

new range of insurance products. This move is also welcomed by the

rating Agencies.

During 2013-2014 policy year, shipping trade has not been easy

for many shipowners. In addition to the high operating expenses

shipowners were asked to contribute to general premium increases

varying between 2.5% to 12% giving an average ratio of 6.89%. Some

of the Clubs also made adjustments in their level of deductibles and

also increases on their FD&D terms. Most of the P&I Clubs were

able to secure the level of GI they requested and some of them with

additional increases due to unfavourable loss records.

Looking at the reinsurance tariff rates during 2014, the percentage

of change has been between 5.26% -5.28% for tankers and dry cargo

vessels. There has been a 20% surcharge on passenger vessels that can

be attributable to the deterioration of the “Costa Concordia” claim.

There are some positive developments on claims trends compared

to previous year as there is a reduction in the number of claims

reported to the Group Pool (layer of USD 9 million-70 million). The

number of claims for the 2013 year has come down to 17 totalling less

than USD 300 million which is an improvement on the previous years

with 25 claims in 2012.

These developments resulted in the increase in clubs’ free reserves

for the 2013 collectively going up by USD 244 million. Compared

with the previous year this is almost a double increase. All of the

clubs have reported profitability with Gard announcing the highest at

USD 49 million surplus maintaining their position as the wealthiest

of the Clubs with USD 944 million free reserves.

The IGA continued to keep a close eye on the regulatory

developments such as the Athens Convention 2002 protocol which

brought higher limits in passenger liability. By virtue of this Protocol,

passengers will have the right to submit a direct claim against the

financial security provider or insurer if the incident happened during

the course of carriage based on strict liability of the carrier.

In addition to this, on 20 August 2013, Maritime Labour Convention

(MLC) 2006 entered into force bringing in additional liabilities for

P&I clubs. What will become an additional burden on Clubs is the

new requirement in 2016 under MLC being the back wages owed

to crew following a shipowner’s insolvency. In order to respond to

the requirements under MLC 2006, the Clubs incorporated some

provisions in their rules for the 2013/2014 period that may need

further amendments depending on future developments. You will

find a separate article in the Introduction section of this report with

more detailed information about the MLC convention.

A noticeable development for the Turkish market, in 2014 renewals,

has been Skuld’s decision to reduce their Turkish membership.

Reasons were singleton/doubleton entries not producing enough

premium or those with unfavourable loss records were asked to

pay significant rises which ended up half the members of this Club

renewing with other group Clubs.

Another important development has been the establishment of the

Turkish P&I just before the Feb 2014 renewals. TPI is presently

concentrating on relatively smaller tonnage trading in local Turkish

waters operating on a basis of fixed premium.

In 2013 London Club has started showing interest also for smaller

vessels. This club was traditionally interested in insuring larger

tonnage and mainly bulk carriers. It is to the benefit of the shipping

market and especially to smaller tonnage operators that there is now

an additional capacity. The club is known for their practical and

friendly approach towards the claims of its members.

It was also reported that Standard Europe P&I Club’s London class

will now start to offer fixed premium P&I with USD 500 million limit

for its members. This Class of the club serves the small size ship

owners and it will be an option for its mutual members to consider.

In our last year’s report we mentioned about fixed facility of Skuld

for small size ships. This year we have also seen West of England

offering for such tonnage a fixed premium facility for P&I insurance

with the same Club rules, including the Omnibus rule.

It was also interesting to see enthusiastic efforts of Standard Club

in seeking support among other clubs to provide direct guarantee

against US OPA 90 pollution risks. It aimed at reducing the cost

for the members who have to buy additional cover via other insurers.

We will continue to note the underwriting changes in 2014 and hope

to explore these in our next report.

UNDERWRITING

13

2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15

American Club 10 15 29 4 2 5 10 10

Britannia 5 23,8 12,5 5 5 5 12,5 2,5

Gard 5 10 15 0 0 5 5 5

Japan Club 10 20 27,5 12,5 10 3 5 7,5

London Club 7,5 17,5 15 5 5 5 12,5 10

North of England 7,5 17,5 17,5 5 3 5 15 7,5

Shipowners 5 20 10 5 0 0 5 5

Skuld 2,5 7,5 15 5 - - - -

Standard Club 5 15 15 3 3,5 5 7,5 12,5

Steamship Mutual 9 15 17,5 5 0 5 7,5 10

Swedish Club 7,5 15 15 2,5 2,5 5 7,5 7,5

UK Club 7,5 17,5 12,5 5 5 3 7,5 10

West of England* 5 15 19 5 5 5 7,5 7,5

INTRODUCTIONINTRODUCTION

TABLE NO. 8 / General Increases

TABLE NO. 9 / Underwriting Performance

-11-22-44-10-192024-498-6-1

USD million

%

Updates will be available on www.omniltd.com.

1 2 3 4 5 6 7 8 9 10 11 12 13

* For West of England the percentage is of the net ETC premium i.e. ETC premium excluding the Group reinsurance cost.

2014ClubsNo

14

INTRODUCTIONINTRODUCTION

The P&I business, particularly the claim handlings are

definitely becoming more and more important, as shipping

is continuing to face increased liabilities, international

maritime and national legislation and regulations.

Clubs have reported high levels of claims activity within the USD 9

million retention, although it seems less than last year. Cargo claims,

continued to be the largest category of claims at the low level i.e. up

to USD 1 million. Other categories of claims have experienced higher

claim amounts, in particular collision and removal of wreck. The high

value claims, in excess of USD 1 million, whilst representing less than

1% of the total number of claims, have consistently accounted for

approximately half of the total value of the claims.

Human error is the first and major factor for the claims. COSTA

CONCORDIA is a good example how the human error could

cause catastrophic results and claims. The majority of this claim

is loss of life and wreck removal. The removal and demolition of

COSTA CONCORDIA is now expected to cost in excess of USD

1.5 billion and the RENA, which also occurred in 2011, more than

USD 450 million.

Today most cargoes except bulk cargoes are containerized.

Undeclared or misdeclared cargoes is a major problem and lead

huge risk to life and property. P&I Clubs have been involved in a

number of multi-million dollar incidents caused by misdeclared

cargo, specifically involving calcium hypochlorite on container

ships. No doubt that there is need for further work to be done

in this area.

Although there is slow global economic recovery in progress,

there has been an increase in the number of failures to pay hire and

demurrage, ship performance disputes due to high bunker prices,

delays and sanction enquiries. Thus, the demand for the FD&D

services remains high.

Turning to the pool claims of the year 2013/2014, 17 pool claims

with a total value of 302 million, were notified to the International

Group. However, the indication is that 2013/2014 will be a better year

for pool claims than recent years, in particular the 2011/2012 policy

year, which included both Rena and Costa Concordia cases.

Having reviewed the nature of the pool claims, 7 out of the 17 claims

involved collision, which for some resulted in grounding, fire on board

and pollution. One ship was breaking into two following grounding

and one ship sank following structural failure that led to the vessel

breaking into two. In that respect, perhaps the P&I Clubs would

prefer to cover RDC as it traditionally was the case i.e. one fourth

only, but due to pressure from brokers and practical reasons, clubs are

now regularly covering four fourths.

The Ebola outbreak in West Africa has resulted in a number legal

and commercial considerations. “Safe Port” is one of them. Do the

owners have to follow charterers order and proceed to a port where

there is an outbreak of Ebola and what if the outbreak is only nearby

the port? If the vessel has called a port where there is an outbreak of

Ebola and subsequently is delayed in a subsequent port of call, will

the vessel then be off hire, and what will be the situation if stowaways

from an affected area is found on board? We shall not try to answer the

questions in this short article but refer you to articles from the leading

maritime law firms and the P&I clubs. It should also be mentioned

that this is not a new situation. An example is SARS (Severe Acute

Respiratory Syndrome) which broke out in Hong Kong in 2002-2003.

CLAIMS

TABLE NO. 10 / Pool Shares 2014/2015

Before L/R After L/R2,6 3,19,0 7,816,1 16,68,3 9,44,1 3,710,6 12,13,8 3,86,6 4,88,9 8,77,7 7,94,9 7,811,0 8,56,4 5,9

%

1 2 3 4 5 6 7 8 9 10 11 12 13

15

INTRODUCTIONINTRODUCTION

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15

American Club 0/20 0/35 0/30 0/25 20/20 25/25 25/25 0/0 0/0 0/0

Britannia 40/30 30/30 30/30 40/40 40/32,5 40/40 40/40 40/40 45/45 45/45

Gard 25/20 25/20 25/25 25/25 25/10 25/15 25/20 25/15 25/15 25/25

Japan Club 30/30 30/60 30/30 30/30 40/40 40/50 40/40 40/40 40/40 40/40

London Club 40/40 40/89 40/89 40/75 40/40 40/40 0/0 0/0 0/0 0/0

North of England 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 30/30 20/20

Shipowners 25/0 25/0 10/0 10/0 10/0 0/0 0/0 0/0 0/0 0/0

Skuld 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0

Standard Club 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0

Steamship Mutual 0/0 0/12,5 0/14 0/20 0/0 0/0 0/0 0/0 0/0 0/0

Swedish Club 0/0 0/35 0/35 0/0 0/0 0/0 0/0 0/0 0/0 0/0

UK Club 0/0 0/20 0/25 0/25 0/0 0/0 0/0 0/0 0/0 0/0

West of England* 20/35 20/55 20/55 20/65 20/20 30/30 30/30 30/30 35/35 35/35

TABLE NO. 11 / Supplementary Calls

%

TABLE NO. 12 / Average Expense Ratio

19,38,011,35,78,412,518,012,310,911,312,19,414,2

%

5 years at 20.02.20141 2 3 4 5 6 7 8 9 10 11 12 13

Updates will be available on www.omniltd.com.* For West of England the percentage is of the net ETC premium i.e. ETC premium excluding the Group reinsurance cost.

16

INTRODUCTIONINTRODUCTION

The shipping market conditions have now been difficult

for 5-6 years with average earnings for almost all types

of vessels, significantly below the 10 years average. The

2014 renewals took place under these tough market conditions

and furthermore were negatively affected by Sanctions and War

Risk Area Restrictions.

Although there are no solid signs for improvements in shipping

earnings in the near future, the world fleet grew by an estimate

3.8% in terms of GT, close to GT 1.14 billion and by 1.7% in

vessels numbers in 2013. It is expected that both number of

vessels and tonnage will grow for the next 10 years.

Gard, North of England, UK, Skuld and Steamship are some

of the clubs with more tonnage on the books after completion

of 2014th renewals, although it is not the spectacular gains of

previous years. Gard declared a rise of 7.1%, North of England

and UK Club by 4%, Steamship Mutual by 4.85%.

General Increases requested by Clubs followed similar pattern

to the previous year where the lowest was 2.5% of Britannia and

the highest was 12.5% of Standard Club.

IT IS NOT LIMITED TO BELOW LIST BUT WE HAVE SEEN THE FOLLOWING CHANGES;American Club won Saga Cruises from Steamship Mutual. They

lost Saltchuk Resources to Steamship Mutual.

Gard won partial fleet of Yasa, Glory Navigation from Britannia.

They lost Klaveness, Fjordl, Eidsvaag, Halten and Stornes to

Skuld and Hydor.

London Club won partial fleet of Zodiac Maritime and Eastern

Pacific from Standard Club. They lost Entrust to Skuld

North of England won partial fleet of Zodiac Maritime, Eastern

Pacific, Thenamaris, J Lauritzen, Saga Shipping, Alstership,

Erwin Strahlmann and NCC from Standard Club, Swedish Club,

British Marine and IF insurance group. They lost Ultrabulk,

Cosco Dalian, PT Arpeni, Reederei Hinsch to Steamship Mutual,

Skuld and Hydor

Shipowners won partial fleet of Ocean Tanker from North of

England. They lost IDO, Dentur and Uzmar to Turkish P&I

Skuld won Saltchuk, Torm, Cosco Dalian, PT Arpeni, Entrust,

Meratus Line, Klaveness, Fjord from UK Club, American Club,

Britannia, Nepia, London, BML, and Gard. They lost Geden,

Mardeniz, Med Marine, Intertrade to West of England, Standard

Club, Turkish P&I and Hydor.

Standard Club won Mardeniz. They lost Zodiac Maritime,

Eastern Pacific, Ocena Tanker, Thenamaris, Samsung Logix,

Daewoo and Keumyang to North of England, North of England,

London Club, Shipowners Club, Steamship Mutual and Korean

P&I

Steamship Mutual won Ultrabulk, Samsun Logix and Daewoo

from North of England and Standard Club. They lost Saga

Cruises to American Club

Swedish Club won partial fleet of Yasa. They lost J Lauritzen to

North of England.

UK Club won partial fleet of BW from Britannia. They lost Yasa

to Gard and Swedish Club.

West of England won partial fleet of Geden from Skuld.

Turk P&I won IDO, Uzmar, Dentur from Shipowners and Med

Marine from Skuld.

Korean P&I won Keumyang from Standard Club

MOVEMENT OF ACCOUNTS DURING THE 2014 RENEWAL

17

INTRODUCTIONINTRODUCTION

TABLE NO. 14 / Owned and Chartered Tonnage Split

GT million

TABLE NO. 13 / Entered Tonnage

2012 2013 2014

17 16 18140 136 131220 232 244104 105 10348 47 48163 170 18020 22 2465 72 75124 135 13193 102 11450 52 56192 200 20466 71 79

GT million

1 2 3 4 5 6 7 8 9 10 11 12 13

Owned Chartered17 1108 23187 5892 1143 5131 4924 N/A75 N/A105 2669 4537 19124 8057 22

1 2 3 4 5 6 7 8 9 10 11 12 13

* Skuld is only Owned tonnage

*Skuld report the fi xed business net premium in % of the total net premium, which is 28%

18

INTRODUCTIONINTRODUCTION

For many years now the IG Club’s have insisted that P&I rates have to be increased and this has resulted in most clubs applying General Increases of varying percentages. Every year the reason is different. One year it was pool claims, another year crash of the stock market, increase of overall claims, Solvency II requirements, S&P requirements, etc. The graph showing the free reserves however do not change and in fact most of the Clubs show an increase in their free reserves.

This year the claims experience of certain Clubs will show favourable results, however we think that these clubs will still charge general increases.

We see that there are new Clubs and fixed premium facilities emerging. Turkish P&I is one of the new comers established to provide P&I cover mainly for domestic waters. China P&I and Korean P&I are two clubs which are providing cover on mutual basis and they are two candidates to IGA membership.

We think the Clubs who diversify their product line to meet industry expectations will be the main players on the horizon. Amongst the P&I Clubs, it has recently been a new fashion to provide cover within different areas, mainly for H&M. The Swedish Club were the pioneers and along with Gard are the market leaders for the one stop shop. Skuld have now followed them but taken a different route by way of establishing a Lloyd’s Syndicate. We are sure that we will very soon see other clubs follow suit.

Current diversification options are forcing us to think there might be reversion in terms of products where H&M and P&I risks will be combined in same policy sometime in the near future.

WHAT DO WE SEE ON THE HORIZON?

19

II. INTERNATIONAL

GROUP CLUBS

20

OTHER

ASIA

NORTH AMERICA

EUROPE

www.american-club.com

Tonnage by Vessel Type Tonnage by Area

BULK CARRIERS

TANKERS

TUG/BARGES/SMALL CRAFT

GENERAL CARGO, CONTAINER VESSELS&

RO-ROS

Higher deductibles and other modifications of the

insurance conditions came to 2%. Irrespective of this

increase of close to 8% , the net premium declined by USD

4.1 million to USD 89.4 million. This is a 4.4% decline in

the net premium. One should then think that the tonnage

entered declined, but that is not the case. The tonnage

increased with approximately 4 %, so the reduction in net

premium is probably a result of the “churn” effect during the

policy year.

The total expenditure came to USD 100.3 million and the

underwriting result was therefore negative with USD 10.9

million. The Clubs equities returned 27.9% but because of

the more cautious investment policy decided back in 2011,

most of the investments are fixed income investment and

therefore the overall portfolio returned 6.7% which is not

bad. In terms of money, it came to USD 14.1 million, and the

free reserves were lifted with USD 3.2 million and now stand

at USD 57.3 million. This is an acceptable figure in terms of

free reserves over GT, but the size of the club makes it more

volatile and that is probably one of the reasons for the S&P

rating being BBB-.

As the individual retention of the Group clubs grow, many

clubs need reinsurance arrangements to secure stability, in

particular the smaller clubs, and American club report that

it has arranged excess of loss cover for USD 4 million in

excess of USD 5 million placed at Lloyd’s of London and

with Partner Re and a reinsurance for its exposure to the

lower Pool with Hannover Re. For 2014 the arrangement

with Hannover Re has been expanded through the purchase

of a whole account aggregate reinsurance of claims within

the Club’s retention.

The Clubs participation in Eagle Ocean Marine (EOM), a

fixed premium program for insurance of P&I and FD&D risks

for smaller vessels in local and regional trades, principally in

the East Asia, Europe, Africa and other areas outside United

States, has been increased from 15% to 20%. An excess of loss

reinsurance of USD 25 million in excess of USD 25 million

has been purchased from the Lloyds market making available

primary cover up to USD 50 million. Further developments

of Eagle Ocean have taken place in 2014 making cover

available for up to USD 100 million and for vessels larger than

the original GT 12,500 cap.

At the 20.2.13 renewal, a premium increase of 10% was announced and the actual cash

increase ended up being 6%, exclusive of additional reinsurance costs.

AMERICAN CLUB

21

Free Reserves

2007 32

2008 34

2009 36

2010 48

2011 64

2012 60

2013 54

2014 57

S&P Rating

2011 BB

2012 BB+

2013 BBB-

2014 BBB-

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 22011 2012 2013 20144

Original % 0 0 0 0 20 25 25 0 0 0

Final/Current 20 35 30 25 20 25 25 0 0 0

USD million

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

115 112 112 108

105 96 94 89

104 106 115 100

1 -10 -22 -11

14 7 16 14

64 60 54 57

2010/2011 2011/2012 2012/2013 2013/2014

American Club Consolidated Financial Year Summary USD million

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

15 16 15 17

1 1 1 1

16 17 16 18

220111 20122 20133 2014

Entered TonnageAMERICAN CLUB

22

OTHER

AMERICAS

ASIA

SCANDINAVIA

EUROPE

OTHER

CONTAINER VESSELS

GENERAL CARGO

BULK CARRIERS

TANKERS (OTHER)

TANKERS

BRITANNIA

www.britanniapandi.com

Tonnage by Vessel Type Tonnage by Area

O wned tonnage is still sizable and stands at GT 108.0

million and the chartered tonnage at GT 23.0

million , producing total entered GT 131.0 million .

The Club is reporting that incurred claims in the 2013/14

policy year were just under USD 205 million, the highest

ever level at the 12-month stage. The number of claim

notifications has gone down from 6,889 the previous

year to 5,821 in 2013/14 a fall on over 15%. However, 40

claim notifications are expected to cost the Club USD

1 million or more each – high value claims - and these

40 notifications accounts for more than 55% of the total

cost of claims for the year. Only two of the high valued

claims are expected to exceed pool level USD 9 million.

Charterers claims are not included in the high value claims

because of the Clubs reinsurance arrangements in respect

of chartered entries.

Although the Club’s net premium has gone down by USD 9.5

million, it must be taken into consideration, that a premium

discount for P&I was offered on renewing 2013/14 tonnage,

amounting to USD 10.3 million across the membership, as

well as a waiver of half of the 50% deferred call for FD&D

in the 2012/13 policy year, amounting to USD 1.4 million.

The underwriting result is still negative, minus USD 21.9

million, but much better than last year’s minus USD 70

million. With a net investment result of USD 55.8 million

a surplus of USD 33.9 million is raising the free reserve to

USD 471.9 million. After all, a reasonable result.

The Club’s first interactive assessment by Standard and

Poor’s (S&P) have just been announced. S&P finds that

the Club’s competitive position and business risk profile is

strong, while the financial risk profile is very strong and an

“A” rating was given.

The tonnage of the Club increased during the year with just under GT 2 million but at the

renewal 20.02.2014 approximately GT 4.5 million was not renewed, leaving the Club with

GT 2.5 million less owned tonnage and GT 2.0 million less chartered tonnage.

5%6%

%31%

23

BRITANNIA

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

103 111 111 108

33 29 25 23

136 140 136 131

220111 20122 20133 2014

Entered Tonnage

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

299 282 294 284

246 236 245 236

242 278 315 258

4 -42 -70 -22

75 49 47 56

454 460 438 472

2010/2011 2011/2012 2012/2013 2013/2014

Free Reserves

2007 301

2008 311

2009 277

2010 376

2011 454

2012 461

2013 438

2014 472

S&P Rating

2011 Api

2012 Api

2013 Api

2014 A

Britannia Consolidated Financial Year Summary*

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 22011 2012 2013 20144

Original % 40 30 30 40 40 40 40 40 45 45

Final/Current 30 30 30 40 32,5 40 40 40 45 45

USD million

USD million

*Boudicca’s results is fully consolidated into the fi gures above

24

ASIA

NORWAY

AMERICAS

REST OF EUROPE

GREECE

GERMANY

PASSENGER & CRUISE VESSELS

BULK CARRIERS

OFFSHORE VESSELS

TANKERS

GAS CARRIERS

MOU

CAR CARRIERS

OTHER DRY

CARGO

CONTAINER VESSELS

Tonnage by Vessel Type Tonnage by Area

Gross Premium for the Group increased 8.4% to USD 959

million and the Group as whole achieved a Combined

Ratio of 97%. For P& I the Combined Ratio was 102%,

which is in line with the Clubs strategy to be within 105%,

however aiming at a Combined Ratio that is slightly below

costs. The underwriting deficit on the P&I was more than

covered by a positive underwriting result from the Marine

and Energy side.

The Club’s investments yielded a gain of 4.3% giving a return

on investments of USD 76 million.

The gross P&I premium was USD 621 million. For the 5th

year in a row the Club reduced the ETC premium for it

mutual members, by reducing the Deferred Call from 25%

to 15%. The amount ceded to members was USD 35 million.

Tonnage in the Club increased to GT 187 million, a 7%

increase that is well above the world tonnage increase and

above the average increase of the IG fleets, which cements

the Clubs position as the largest of the P&I Clubs. Last

year we reported that the Club had 7 Pool claims in the

2012 insurance year. In 2013 insurance year the Club did

not see any claims in excess of USD 10 million. These

numbers just shows the volatility and the random at which,

such big claims happen.

The Club opened an office in Rio de Janeiro, subsequent

to receiving license to write reinsurance business in Brazil.

An office was also opened in Singapore, which provides

underwriting and claims handling for the wider geographical

area of South East Asia and Oceania.

In the Clubs continued efforts to enhance the product range

for its members and clients, the Group introduced two new

insurances. A property insurance to cover damage or loss of

containers as well as a Ship Managers Liability policy to cover

the liabilities arising from negligence in the performance of

their contractual obligations.

2013 was a year of change for Gard, as Rolf Thore Roppestad,

a long-time employee of Gard , was appointed as new CEO,

replacing Claes Isacson, who sadly passed away earlier in the

year. New Chairman of the Board became Bengt Hermelin,

Semco Shipholding, Singapore, who took over from Stephen

Pan, World Wide Shipping, Hong Kong, who has been on the

Clubs board for almost 2 decades. Although there are changes

at the top it is with people who have both served the Club for

a long time, so we expect no major changes, but continued

steady progress.

Even though the Gard Group obtained very good results

for 2013, it still cautions that the marine insurance market

for all lines of its business is very competitive, so it calls for

prudent risk selection and correct pricing of all its insurance

portfolios.

Once again there is very positive reporting from the Gard Group. The Club was able to lift its

Free Reserves to USD 944 million, an increase of USD 50 million from the previous year.

www.gard.no

GARD

5%5%

4%3%

14%

9%2%

25

GARD

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

145 163 174 187

51 58 58 58

196 221 232 244

220111 20122 20133 2014

Entered Tonnage

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME*

TOTAL FREE RESERVES*

463 505 530 586

377 414 405 444

403 444 498 488

-26 -29 -93 -44

140 49 114 76

790 826 895 944

2010/2011 2011/2012 2012/2013 2013/2014

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 22011 2012 2013 20144

Original % 25 25 25 25 25 25 25 25 25 25

Final/Current 20 20 25 25 10 15 20 15 15 25

USD million

*Investment Income and Free Reserves are given at Group level

*The Owned Tonnage fi gure includes MOUs

Free Reserves

2007 512

2008 581

2009 430

2010 638

2011 790

2012 826

2013 895

2014 944

S&P Rating

2011 A

2012 A

2013 A+

2014 A+

USD million

GardConsolidatedFinancial YearSummary

26

PHILLIPINE

OTHER

BAHAMAS

PANAMA

SINGAPORE

HONG KONG

LIBERIA

MARSHALL ISLAND

JAPAN

OTHERGENERAL CARGO

BULK CARRIERS

CAR CARRIERS

LPG AND LNG

CONTAINER VESSELS

TANKERS

The fleet was stable at GT 91.8 million owners tonnage

(2012/13 GT 91.6 million ), but the charterers

portfolio decreased to GT 11.4 million., so now the total fleet

stands at GT 103.2 Million.

Gross Premium increased to USD 258.9 million from USD

223.5 the previous year. The Club struggled with the JPY

that weakened towards the USD from JPY 79 to JPY 90.

Therefore the so-called “Abenomics”, the financial stimulus

program in Japan, did not give much help to the Club that

saw the investments give a surplus of USD 24.8 million

compared to a gain of USD 34.2 million the year before. The

decreasing JPY diluted the premium for own account, but it

achieved a technical result of minus USD 9.8 million, which

was somewhat better compared to the year before, where it

had an underwriting loss of USD 26.3 million.

Overall the Club’s financial year produced a surplus of USD

15.0 million, when accounting in JPY. But when the figures

are converted into USD the result of the year actually slightly

decreased the Free Reserves from USD 157.5 million to

USD 156.0 million.

The Club experienced a slight decrease in the number of

claims, however the Club experienced 2 pool claims. 50% of

the claims are cargo claims, 30 % crew claims and the Club

saw a reduction of the collision cases. The Club has been

very active in its Loss Prevention efforts by having seminars,

workshops and arranging visits to their members and their

vessels, and the Club intends to maintain these activities.

The Club has had a reasonable financial income result, apart

from the depreciation of the JPY, however the claims-side

has improved considerably, which seems to show the positive

results from the Loss Prevention efforts of the Club.

However, the Club has not been able to increase the fleet on

the Owners side, and has actually seen quite a reduction on

the Charterers side, so this part of the “JPI’s Change” plan

has not been accomplished.

Progress in this direction will hopefully be achieved by

the opening last autumn of an office in Singapore, that is

established to perform underwriting - and claims-service.

The Club expects that by operating this office they will not

only increase the membership, they also hope that it will

assist in having a better spread of members geographically as

well as country wise.

The Club has improved the financial performance, but still

has a way to go in relation to its ambition to increase the

owned tonnage of the club to GT 100 million

As the Club’s official accounts are expressed in JPY, the

reporting in USD is inaccurate due to the changes in the rate

of exchange from year to year.

2013/14 was the second year for the Medium Term Operational Plan “ JPI’s Change”,

and the Club almost performed according to the plan.

JAPAN CLUB

www.piclub.or.jp

Tonnage by Vessel Type Tonnage by Area*

*The percentages is by ship’s registry

5%2%2%

5%4%2%

2%6%

27

JAPAN CLUB

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

92 90 90 92

14 14 15 11

106 104 105 103

220111 20122 20133 2014

Entered Tonnage

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

231 252 245 259

- 206 200 182

209 207 190 191

22 -1 2 -10

-15 -3 28 25

158 167 158 156

2010/2011 2011/2012 2012/2013 2013/2014

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144

Original % 30 30 30 30 40 40 40 40 40 40

Final/Current 30 60 30 30 40 50 40 40 40 40

USD million

*The accounts for Japan Club are not easy to reconcile in USD as the clubhave their accounts in Yen, and there in the year has been considerable changes

in the rate of exchange between the two currencies.

Japan Club Consolidated Financial Year Summary*

Free Reserves

2007 91

2008 117

2009 124

2010 134

2011 158

2012 167

2013 158

2014 156

S&P Rating

2011 BBBpi

2012 BBB

2013 BBB+

2014 BBB+

USD million

28

AMERICAS

SOUTHERN EUROPE

NORTHERN EUROPE

ASIA

GENERAL CARGOGAS CARRIERS

BULK CARRIERS

CONTAINER VESSELS

TANKERS

The Club made a year surplus of USD 6.6 million, which

raised the Free Reserves to USD 160.6 million. This

increase was achieved due to a 7% return on investments,

whereas the underwriting result was negative, USD 18.7

million.

Investments made a profit of USD 24.4 million, which

was obtained due to the Clubs relatively high appetite for

investments risks. Of the invested capital 25.2% was in

stocks, 62.4% fixed income and 12.4% in cash and alternative

investments. By having a relative high exposure on the stock

market, the Club gained well on the worldwide recoveries of

the stock markets in 2013.

The Club had a moderate increase of the fleet, by adding

GT 2 million, so now standing at GT 43.3 million. Of the

vessels added to the Club almost 1/3 were new buildings, so

the average age of the entered owners’ tonnage is today just

under 9 years.

On the claims-side, the Club saw a further moderation in the

number of attritional claims, but the average cost of the claims

increased. There was also an increase of the medium and high

severity claims, so the total claims for the year reached USD

93 million, which is up USD 10.3 million, on the previous year.

At the renewal 2013, the Club had a General increase of

12.5% that raised the gross premium for the year to USD

106.9 million – net premium USD 86.1 million. Operating

expenses were stable at USD 11.9 million, however as

claims increased to USD 93.0 million, there was a total

expenditure of USD 104.9 million, which produced a

technical result of minus USD 18.8 million. A deterioration,

compared with the year before.

At the renewal 2014 the General Increase was 10%, and the

Club also sought to increase the deductibles.

The financial result for 2013/14 is consistent with the

Clubs mutual, not-for-profit business model, where

positive investment returns have a part to play in

achieving a balanced operating result. But at the same

time the Club’s underwriting plan targets improved

technical performance along with progress towards a

combined ratio which should produce a break-even

financial result or better.

For the financial year 2012/13 the Clubs business model

worked out fine with an operating surplus of USD 6.6

million, but the Club is heavily dependent on a high return

on investments, as the underwriting results have been

consistently negative for the last 5 year.

Even with a 10% General Increase at the 2014 renewal the

Club would need very good claims-figures to reach their

underwriting target of a break-even/or better.

All in all a positive year for the Club, that saw positive development for tonnage, premium and

investments, but a bigger deficit on the underwriting result.

www.lsso.com

LONDON CLUB

Tonnage by AreaTonnage by Vessel Type

3%2%

29

LONDON CLUB

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

39 41 41 43

5 5 5 5

44 46 46 48

220111 20122 20133 2014

Entered Tonnage

Free Reserves

2007 111

2008 81

2009 116

2010 141

2011 145

2012 145

2013 154

2014 161

S&P Rating

2011 BBBpi

2012 BBBpi

2013 BBBpi

2014 BBBpi

USD million

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

113 109 102 107

- 88 80 86

126 105 94 105

-10 -17 -14 -19

14 17 24 24

145 145 154 161

2010/2011 2011/2012 2012/2013 2013/2014

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144

Original % 40 40 40 40 40 40 0 0 0 0

Final/Current 40 89 89 75 40 40 0 0 0 0

USD million

London Club Consolidated Financial Year Summary

30

OTHER

NORTHERN EUROPE

SOUTHERN EUROPE

AMERICAS

MIDDLE EAST

ASIA PACIFIC

SCANDINAVIA

North has taken another great leap forward by finalizing the

merger with Sunderland Marine, and thereby creating

the North Group. The Group expects the total premium to be

USD 500 million with total assets of USD 1.500 million and

Free reserves of USD 350 million for the 2014/15 year. The

merger was approved 28 February 2014, so now the Group is

working hard at integrating the two entities to obtain the full

benefits of the merger.

Sunderland Marine, that has roots back to 1882, is a specialist

in fishing vessels, small crafts and aquaculture risks and it has

some 29 thousand policies in 50 countries, as well as offices

in Australia, Canada, the Netherlands, New Zealand, South

Africa and USA.

The merger has created a Group with greater diversification

of product lines, where cover can be offered World Wide to

all segments of shipping, from small fishing vessels to the

largest of ships.

In our Report this year we review the facts and figures for

North P&I Club only, as the effects of the merger will

only be visible in the figures for the present policy year

that ends 20/02/2015.

North had a good year, where premium increased to USD

383.5 million and the fleet increased 4% to GT 131 million

of own tonnage and almost GT 50 million charterers tonnage.

The Club experienced its two most expensive claims in 2013.

The M/V Start, a pollution and wreck removal case in South

Africa and the M/V Wu Yi San a collision with a Terminal

in South Korea. The total liabilities for these 2 claims are

expected to be USD 165 million, but due to the International

Pool and Re-insurance arrangements the Club will only bear

approximately USD 35 million of these costs.

Despite the two big claims the Club had a good claims year

with a reduction in the number and value of claims up to USD

1 million. Net claims reduced by USD 22 million to USD 231

million, which created a Combined Ratio of 90.1% - a good

improvement on the previous 2 years.

A surplus underwriting profit of USD 20.4 million was

achieved. The investments gave a return of 1.94% or USD 13.1

million, so in total the Club had a surplus of USD 33.5 million.

However, due to a change of how to record the Clubs Pension

obligations, a deficit of USD 33.5 million (due to unusually

low interest rates) had to be reported directly in the Clubs

balance sheet, so the surplus from the technical result and the

investments, was wiped out by the Pension reporting change.

But with no surplus – or loss the Club maintained the Free

Reserves at USD 312.2 million, which seems to be at the lower

end of the scale for a fleet of this size.

The Clubs has implemented a new organizational structure

designed to improve operational effectiveness and service.

The geographical teams have been restructured to five

areas: Americas and UK, Middle East and India, Asia

Pacific, Europe and Greece. It will be interesting to see

to which extent the former Sunderland offices will be

utilized by the Group.

Irrespective of the merger the Club - or now - the Northern

Group maintains its strategic vision to be “the most cost-

effective Marine insurance group providing the highest

levels of service”.

A busy and eventful year culminating with the historic merger with Sunderland Marine.

www.nepia.com

NORTH OF ENGLAND

TANKERS

OTHER

BULK CARRIERS

GENERAL CARGO

LNG

CAR CARRIERS

CONTAINER VESSELS

Tonnage by Vessel Type Tonnage by Area

2% 7%6%1%

2%4%

31

NORTH OF ENGLAND

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

105 123 127 131

45 40 43 49

150 163 170 180

220111 20122 20133 2014

Entered Tonnage

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144

Original % 0 0 0 0 0 0 0 0 30 20

Final/Current 0 0 0 0 0 0 0 0 30 20

Free Reserves

2007 190

2008 220

2009 211

2010 240

2011 312

2012 314

2013 312

2014 312

S&P Rating

2011 A

2012 A

2013 A

2014 A

USD million

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

314 346 365 385

- 291 295 307

258 297 305 273

57 -6 -10 20

16 14 9 13

312 314 312 312*

2010/2011 2011/2012 2012/2013 2013/2014

USD million

North of England Consolidated Financial Year Summary

* Reduced with USD 33,5 million due to pension obligations

32

AFRICA

OTHER

S.EAST ASIA & FAR EAST

AUSTRALIA, NZ, SOUTH PACIFIC

SOUTH,CENTRAL AMERICA

MIDDLE EAST & INDIA

EUROPE

CANADA & USA

Traditionally the Club has always focused on smaller

vessels, but the Club is now accepting dry cargo and

tankers up to GT 20,000 and within the offshore specialist

sector even larger units, with some barges entered over GT

30,000. This change is reflected in the tonnage by vessel type

where barges are now the largest group accounting for 31%

of the entered tonnage. It will be interesting to follow the

development in the Clubs portfolio going forward.

The Club has closed the Canadian branch in Vancouver, as

the volume of business was not sufficient to justify a full

service branch. On the other hand, a new branch has been

opened in Hong Kong, but in the first instance this will not

operate as a full service branch as the intention is to service

the Hong Kong members from Singapore in the short term.

The Club is still growing in a controlled way both in terms of

vessels entered and in tonnage. The number of vessels grew

by 1,118 or 3.4% to 33,899 vessels and the tonnage grew by

GT 1,7 million or 7.8% to GT 23,6 million, which is slightly

lower growth than last year.

The net premium grew by USD 13.0 million or 6.5% to USD

213.1 million. The total expenditures came to USD 210.8

million and the Club produced a positive underwriting result

of USD 2.3 million.

The Club reports that its absolute investment return on the

consolidated portfolio came to 4.4%, not much in the present

market, but a result of the portfolio consisting of 76% fixed

income securities and cash and 24% equities.

In order to secure a continued stable development the Club

have placed a three-year stop-loss cover with Swiss Re for

claims up to USD 1.5 million, with the previously existing

layers of reinsurance with Lloyd’s and Munich Re, covering

in excess of USD 4 million up to the Club’s retention on the

Pool of USD 9 million.

On the claims side the Club saw a continuation of the trend

also reported by other clubs of a greater number of larger

claims in the range of USD 1 million to USD 5 million. These

claims are now protected by the stop-loss cover and other

reinsurance facilities mentioned above, but that has of course

its price. However with the exception of cargo claims then all

claims categories have decreased in terms of USD per GT.

The club is presenting an acceptable result with combined ratio 98.9% and an increase

in the number of vessels entered.

SHIPOWNERS’ CLUB

www.shipownersclub.com

BARGES

YACHT

OFFSHORE

FISHING

PASSENGERVESSELS

HARBOUR

TANKERS

DRY CARGO

Tonnage by Vessel Type Tonnage by Area

8%

4%4%

2%

4%3%1%10%

33

SHIPOWNERS’ CLUB

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

18 20 22 24

- - - -

18 20 22 24

220111 20122 20133 2014

Entered Tonnage

Free Reserves

2007 130

2008 124

2009 96

2010 135

2011 188

2012 234

2013 276

2014 299

S&P Rating

2011 BBBpi

2012 A-

2013 A-

2014 A-

USD million

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144

Original % 25 25 10 10 10 0 0 0 0 0

Final/Current 0 0 0 0 0 0 0 0 0 0

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

200 216 227 244

174 190 200 213

145 161 191 211

25 29 9 2

27 18 32 21

188 235 276 299

2010/2011 2011/2012 2012/2013 2013/2014

USD million

Shipowners’ ClubConsolidatedFinancial YearSummary

34

EUROPE

AMERICAS

ASIA PACIFIC

TANKERS

OTHER

PASSENGER VESSELS

CONTAINER VESSELS

BULK CARRIERS & GENERAL CARGO

The Net premium has gone up by USD 45.1 million or

16,2 % and now stands at USD 322.8 million. Total

expenditures amount to USD 318.9 following an increase

of 15.2 percent leaving an underwriting surplus of USD 3.9

million. Together with the investment income of USD 27.1

million less taxes of USD 2.0 million, it raises the free reserves

by 8.5 % to USD 334.5 million.

With respect to investments Skuld still keeps a moderate

risk profile with the majority of the invested assets allocated

to low risk bonds. The consequence is a return of 5.4 % in

a year where the stock market generally has gone up by a

greater percentage. Contributions to the pool is based on the

individual clubs statistics. For 2014/15 the Clubs share of the

pool is 6.6% while the loss ratio adjusted contribution is 4.8%

meaning approximately 27% better than average. Therefore,

although the Pool Claims are random by nature, then some

clubs are over time hit harder than others and that is of course

why a loss ratio system has been implemented.

Skuld have abolished the use of general increases. However as

Members still see or feel that “general” increases are imposed

on them, we are still of the opinion that it would be fairer to the

members and in fact more in line with Skuld’s transparency

policy, if the Club announce general increases, now that in

reality they are there anyway.

At the 2014 renewal, Skuld lost market share in Turkey.

One reason was premium increases another being the

claims service. We are currently waiting to see if the Club’s

claims service will improve and respond with promptness

and suitability to the needs of their members. The Club’s

Annual Review for 2013 states “Service and Competence

You Can Rely On “which is exactly what is required going

forward. The heading of CEO’s Douglas Jacobsohn’s report

is: Diversification and a robust bottom line. No question

that for many of the clubs diversification has come to stay.

For Skuld the Lloyds syndicate “Skuld 1897” is important

and the expectation is that by 2020 commercial operations

will deliver half of Skuld’s premium income. One most hope

that at that time “Skuld 1897” will also contribute to positive

result. In 2013 the Lloyds Syndicate generated less premium

and higher operating expenses than in 2012 producing a loss

on USD 8.6 million. The Lloyds syndicate is still young but

the question is how many years will losses be tolerated on

a new business venture before it is necessary to review the

strategy. With the continued pressure on Hull & Machinery

rates it is difficult to see how this book of business can grow in

the current market conditions.

The Club has implemented a member bonus system. We have

been informed by the club that it has not declared any dividend

yet to owners. The dividend will be gradually built up as the

Club grows the Lloyd’s business. Each policy year in Lloyd’s

are “open” for three years before they close and dividends

are paid out. The Club has concluded the start-up phase of

the syndicate and expects positive results to be accumulated

going forward. The Club will monitor the performance and

consider on an annual basis if there are sufficient surpluses

from the individual policy years to distribute dividends. So no

accurate prediction of when dividend can be expected paid.

In April 2014 it was announced that Ståle Hansen was

appointed new CEO from the beginning of 2015. Ståle

Hansen has been with Skuld since 2002 and COO for

the latest four years. There is no doubt that he knows the

business extremely well and we wish him good luck in his new

position. Douglas Jacobsohn the present CEO will continue

as an Executive board member where it is understood, he will

be specifically committed to the 2020 goals of the club.

Also for 2013 Skuld is able to present an annual review with an underwriting surplus.

It is now the 11th year in a row that Skuld ends up with an underwriting surplus,

which is a record that will be difficult to beat. On the other hand an underwriting

surplus is necessary if Skuld wants to grow and that is the goal. More tonnage or rather

more business will require more capital, in particular higher free reserves.

www.skuld.com

SKULD

Tonnage by Vessel Type Tonnage by Area

8%

35

SKULDGT million

58 65 72 75

- - 18% 15%

220111 20122 20133 2014

Entered Tonnage

Skuld is no longer reporting fi xed business in GT. We are therefore reporting the fi xed business net premium in % of the total net premium

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

272 300 318 379

- 262 278 323

209 250 277 319

31 12 1 4

37 15 19 27

266 291 308 335

2010/2011 2011/2012 2012/2013* 2013/2014*

Free Reserves

2007 191

2008 204

2009 144

2010 202

2011 266

2012 291

2013 308

2014 335

S&P Rating

2011 A-

2012 A-

2013 A

2014 A

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144

Original % 0 0 0 0 0 0 0 0 0 0

Final/Current 0 0 0 0 0 0 0 0 0 0

USD million

USD million

Skuld Consolidated Financial Year Summary

*Skulds share of Syndicate 1897 is consolidated into the fi gures.

OWNED/MUTUAL

FIXED NET PREMIUM IN % OF TOTAL NET

PREMIUM

36

GREECE

JAPAN

USA

GERMANY

ITALY

CANADAREPUCLIC OF

KOREA

REST OF ASIA

REST OF THE WORLD

REST OF EUROPE

TANKERS

CONTAINER & GENERAL CARGO

OTHER

PASSENGER VESSELS & FERRY

OFFSHORE

DRY BULK

At the renewal 2014/15 the club announced a general

increase of 12.5% and if achieved then it must be

expected that the Club will return to underwriting surpluses

and a combined ratio below the magic 100.

Owned/mutual tonnage was stable with GT 95 million

while the chartered tonnage went down a little to GT

26 million. The reduction in the charter tonnage is not

affecting the net premium income that much as the

net premium increases were around 10%, no doubt a

consequence of general rate increases.

On the claims side the Club has, like other clubs, seen

that the total incurred claims cost being concentrated in a

relatively small number of large claims. The top 20 claims by

value, of which two have been notified to the Pool, accounted

for over two-third of the overall cost for the year. With respect

to a specific claims group the Club is reporting that the cost

of fines has increased substantially and that MARPOL claims

continue to be a source of concern.

The Club launched in 2012 covers for Kidnap and

Ransom, Traders and Intermediaries risks and is now

reporting significant interest from members and some

interest from non-members in these products. In April

2013 the Club launched a Hull facility with support of

leading London market hull underwriters and the club

is reporting that a number of covers have been bound,

without mentioning how many.

The Club has also launched a fixed premium P&I cover

with limits up to USD 500 million. This facility is now

the major reinsurer of Turkish P&I, a new fixed premium

facility you can read about in section III of this P&I report.

The investment portfolio of the club has not changed

much, consisting mainly of Sovereign Bonds (44%) and

Corporate Bonds (31%), while Equities is now (15%).

This reflects a fairly cautious investment policy, but

on the other hand the result is a return of only 0.6% in

a year where equities have gone up with much higher

percentages. As a consequence the net investment

income comes to only USD 10 million and with an

underwriting loss of USD 4 million the Clubs free

reserves have only increased by USD 6 million from USD

363 million to USD 369 million.

The Club improved its performance considerably ending up with a combined ratio of

101.5% and underwriting result minus USD 4 million - in contrast to the preceding year

where the combined ratio was 113% and underwriting result minus USD 40 million.

Tonnage by Vessel Type Tonnage by Area

STANDARD CLUB

www.standard-club.com

9%3%

12%

7%6%6%

22%

9%

37

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

85 95 105 105

38 29 30 26

123 124 135 131

220111 20122 20133 2014

Entered Tonnage

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

266 286 294 336

- 221 231 253

249 265 271 257

18 -44 -40 -4

56 47 50 10

317 353 363 369

2010/2011 2011/2012 2012/2013 2013/2014

Free Reserves

2007 217

2008 226

2009 176

2010 243

2011 317

2012 353

2013 363

2014 369

S&P Rating

2011 A

2012 A

2013 A

2014 A

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 22011 2012 2013 20144

Original % 0 0 0 0 0 0 0 0 0 0

Final/Current 0 0 0 0 0 0 0 0 0 0

USD million

USD million

Standard ClubConsolidatedFinancial YearSummary

STANDARD CLUB

38

FAR EAST

MIDDLE EAST & INDIAN SUB-CONTINENT

LATIN AMERICA

NORTH AMERICA

EUROPE

BULK CARRIERS

TANKERS

OTHER

GENERAL CARGO

CRUISE & FERRY

CONTAINER VESSELS

F or the 2013/14 policy year, the General Increase was

7.5%, which made the year end with a Combined

Ratio of 96.7%, a great improvement from a C/R of

112.5% the year before. The Club aims to have a 3 year

rolling C/R of 100%.

Owners tonnage increased from GT 65.3 million to GT 68.7

million and the Charterers book increased at renewal from

GT 37 million to GT 45 million, so a total fleet of GT 113.7

million. The Club has stated that “Growth is not a priority

for the Club”, however it has also stated that the Boards

target is to increase the tonnage 110% of the growth of the

IG as a whole. They reached their goal this year with a 5%

increase of the owned tonnage and indeed with the increase

of 22% on the Charterers business.

The gross premium for 2013/14 was USD 345.7 million, up

USD 30 million from the previous year.

The Club experienced a reduction of 22% in the costs of the

attritional claims up to USD 250.000, but saw that claims

in excess of this amount increase both in numbers and in

value, in particular the claims between USD 1.8 million and

USD 9 million. The Club experienced 2 pool claims in the

policy-year. Net claims for the year amounted to USD 232.4

million, down from USD 266.2 the year before, so producing

a technical surplus for the year of USD 9.3 million.

The Club has a conservative investment policy and in the

present market it yielded a modest return of 0.9 %, giving

a net of USD 5.7 million on the Non-Technical account.

Traditionally Steamship has not ventured into other lines

of insurance, but has now expressed that “if the risk profile

is acceptable and real benefits can accrue to ship-owners

then the board will give any proposal careful consideration”.

So the Club now intends to offer cover for War, Piracy and

related Hull risks, as well as for Kidnap and Ransom and War

P&I risks. This diversification is intended to reduce conflict

between underwriters providing separate coverage as it is

now all provided for under “one roof” and it is expected to

produce surplus both for the Club and the Members.

Steamship will also streamline its organization and

structure. Previously it operated 2 Clubs, SSM Bermuda

and SSM London. The intention is now to only operate

SSM London as the underwriting unit and SSM Bermuda

will continue as its re-insurer.

At the renewal 20.2.2014 the Club had a General Increase of

10% and also increased deductibles. There was a certain de-

selection of members as well, so with the streamlining of the

organization, a diversified product-line, higher deductibles

and premium, it looks very much as if Steamship have

paved the way for another positive year.

After 2 years with losses the Club now looks to be back on the right track by posting a

surplus of USD 14.9 million, increasing the Free Reserves to a total of USD 301.2 million.

Tonnage by Vessel Type Tonnage by Area

STEAMSHIP MUTUAL

www.simsl.com

6%3% 7%

39

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

58 63 65 69

34 30 37 45

92 93 102 114

220111 20122 20133 2014

Entered Tonnage

Free Reserves

2007 158

2008 186

2009 188

2010 252

2011 303

2012 296

2013 286

2014 301

S&P Rating

2011 A-

2012 A-

2013 A-

2014 A-

USD million

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144

Original % 0 0 0 0 0 0 0 0 0 0

Final/Current 0 12,5 14 20 0 0 0 0 0 0

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

316 330 315 346

268 278 271 285

246 319 305 336

21 -41 34 9

31 29 24 6

303 296 286 301

2010/2011 2011/2012 2012/2013 2013/2014

USD million

Steamship MutualConsolidatedFinancial YearSummary

STEAMSHIPMUTUAL

40

ASIA PACIFIC

OTHER

SOUTH EUROPE

NORTH EUROPE

BULK CARRIERS, GENERAL CARGO

& RO-RO

PASSENGERVESSELS

OTHER

TANKERS

CONTAINER VESSELS

T he combined ratio for P&I alone was 113% down

from 124% in 2012 clearly an improvement but still

on the high side.

Owned/mutual GT is reported to be GT 37.1 million, an

increase of GT 1.3 million and the fixed business GT 19.2

million bringing the total to GT 56.3 million a total increase

on GT 4.5 million or almost 9%.

The total consolidated calls and premiums came to USD

172.3 million and the net premium to USD 125.8. Although

the gross premium is increased with USD 2 million then

the net premium is reduced with USD 3.8 million. With

total expenditures on USD 117,7 million the club ends up

with an underwriting profit on USD 8.1 million.

On the investment side, the club maintained an 80/20 mix

between fixed income and equities. However with a over-

weighting in emerging markets and in consequence the

total return came to only 3% or USD 8.9 million opposed

to 7% or USD 22.4 million last year. The Club is report-

ing that the claims frequency is reduced during 2013, but

large claims continue to rise, a general pattern across most

of the IG clubs, although Swedish Club have had no Pool

claims in 2013. It also appears that claims within Marine

and Energy must have come down as the combined ratio

for that part of the business was 70% as opposed to 97%

for the preceding year.

The Club has reinforced its commitment to the Norwegian

market. The team has been increased and both marketing

and claims service is now offered from the office in Oslo

that mainly deals with the energy market. The energy sub-

class is now generating a profit.

Free access for members to Maritime Resource Manage-

ment training (MRM) is offered for a period of two years

in the belief that loss prevention training is the most ef-

fective tool available to reduce exposure to accidents. Yes,

training is probably an effective tool, but many owners or-

ganize training in one or the other way themselves and the

question you can raise is whether a P&I club necessarily

shall offer “free” training, which of course then is paid as a

general cost.

The Club managed to bring its consolidated combined ratio down to 94% from 110% in

2012 and produce a positive result on USD 17 million overall corresponding to an increase

on around 11% of the free reserves, although the finance income was not very impressive.

www.swedishclub.com

SWEDISH CLUB

Tonnage by Vessel Type Tonnage by Area

1%

41

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

31 34 35 37

16 16 16 19

47 50 51 56

220111 20122 20133 2014

Entered Tonnage

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

160 174 170 172

124 134 130 126

144 147 143 118

18 -12 -13 8

14 4 22 9

151 142 151 168

2010/2011 2011/2012 2012/2013 2013/2014

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144

Original % 0 0 0 0 0 0 0 0 0 0

Final/Current 0 35 35 0 0 0 0 0 0 0

Free Reserves

2007 102

2008 100

2009 107

2010 122

2011 151

2012 142

2013 151

2014 168

S&P Rating

2011 BBB

2012 BBB+

2013 BBB+

2014 BBB+

USD million

USD million

Swedish Club Consolidated Financial Year Summary*

* Include the H&M class of business

SWEDISH CLUB

42

EUROPE, MIDDLE EAST & AFRICA

AMERICAS

ASIA PACIFIC

BULK CARRIERS, GENERAL CARGO

PASSENGERVESSELS

OTHER

GAS CARRIERS

CONTAINER VESSELS

TANKERS

W ith the Club’s general increase of 10% where

approximately 7,5% was achieved, there is a hope that

next years Combined ratio will be below 100%, provided of

course that the club is not hit with an increase in claims not

covered by reinsurance.

The Club was successful in attracting further tonnage and

the owned/mutual book grew with additional GT 4 million to

GT 124 million. The chartered/fixed entry has for some years

been stable on GT 80 million and this year is no different.

The number of claims are going slightly down, but the average

cost of claims is increasing. Only one percent of the claims

exceed USD 0,5 million, but these claims represent 60% of

the total claims cost. Pool Claims are random by nature, but

on the other hand contributions to the pool is based on the

individual clubs statistics. For 2014/15 the Clubs share of the

pool is 11.0% while the loss ratio adjusted contribution 8.5%

meaning approximately 22% better than average.

In order to manage claims volatility the Club is buying

reinsurance to protect a surge in the frequency of the smaller

claims and the impact of a single major loss. That makes

sense as it levels out the impact of claims volatility .The Club

is not buying protection for the day-to-day claims as in the

long term that will always end up being more expensive than

picking up the claims one self.

The asset allocation of the Club is relatively conservative

and the result is an investment return of USD 36.4 Million

net of finance costs of USD 8.3 million. In the 2014 Report

& Accounts it is mentioned in the introduction that the

investment return is 4,5% (USD 44 million) but that figure

does not take into account finance cost.

With a combined ratio of 102% the underwriting loss came to

USD 6 million and with the investment return of USD 36,4

million and other adjustments, in particular an adjustment

on the Clubs cash flow hedging reserve of USD 5.9 million,

the free reserves are lifted from USD 494 million to USD 528

million, comprising the underlying free reserves of USD 430

million and hybrid capital of USD 98 million.

The Club is getting closer to its long term goal of achieving a combined ratio of 100% or

better with this years combined ratio being 102%. In recognition of the measures taken,

S&P have restored the Club’s A (stable) rating.

Tonnage by Vessel Type Tonnage by Area

www.ukpandi.com

UK CLUB

3%

5%

43

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

105 112 120 124

80 80 80 80

185 192 200 204

220111 20122 20133 2014

Entered Tonnage

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME*

TOTAL FREE RESERVES** ***

365 361 360 396

371 290 280 303

361 288 300 309

4 2 -21 -6

70 19 31 36

478 486 494 528

2010/2011 2011/2012 2012/2013 2013/2014

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144

Original % 0 0 0 0 0 0 0 0 0 0

Final/Current 0 20 25 25 0 0 0 0 0 0

Free Reserves

2007 263

2008 229

2009 334

2010 409

2011 478

2012 486

2013 494

2014 528

S&P Rating

2011 A-

2012 A-

2013 A-

2014 A

USD million

USD million

UK ClubConsolidatedFinancial YearSummary

*Investment income is net of fi nance costs USD 8,3 million**Include the Hybrid Capital raised in 2008. 2013/14 USD 98,3 million

*** Include for 2013/14 Cash fl ow hedging reserve USD 5.9 million and reduction in hybrid capital on USD 1,4 million

UK CLUB

44

BULK CARRIERS

FERRIES & PASSENGER VESSELS

OTHER

GENERAL CARGO/REEFERS

CONTAINER VESSELS

TANKER & OBO’S

The main contributor to the Clubs improved financial

performance is a continuing lower level of own claims,

very much helped by the Clubs decision at 2011 renewal to

reduce the exposure to some higher risk entries. This result

can be clearly seen as the Combined Loss Ratio since 2011

has gradually reduced from 118% to now 100.8%. In addition,

the Club has benefitted from a substantial reduction of its

contribution to the IG Pool Claims, where its share today is

5.88%, down from 14% some years ago.

The owned fleet grew almost 9% from GT 52.7 million in

2013 to GT 57.2 million after renewal 2014. The Charterers

entries have also had a good increase to an estimated GT 22

million .

In 2013 the Club established a facility for Fixed Premium

cover for vessels up to GT 5.000. It appears that the Club

has had limited success with this facility, but is of the

view that it enables the Club to compete more effectively

in specific markets, where commercial fixed premium

facilities may otherwise appear more attractive. However,

the Club also expresses that for this segment prudent

underwriting is essential.

On the financial side the Club had a return on investments

of 2% on invested capital, but due to an increased valuation

of the Clubs owned office at Tower Bridge in London, the

total return on assets stood at 3.4%, a total of USD 20.2

million. The Club has a very conservative investment

policy, and realizing a low return on some parts of the

portfolio during the year, the Club has slightly adjusted the

investment policy.

The Club performed very well during the year and seems

to be on target for their set goals with a 9% increase of the

owned tonnage, a 9.5% increase of the Free Reserves and a

Combined Loss Ratio of 100.8%.

However, the Club warns that all these positive factors

may not continue, so they express caution on the view

expressed by Brokers, that Clubs during difficult years for

the shipping-industry, should support their members by not

charging increases of the premiums, as the Clubs are already

Overcapitalized.

The Club states that “This view ignores the current

pressure of increased regulation and, even more so, pressure

from those same commentators for Clubs to maintain credit

ratings at a level regarded as “acceptable security”. Such a

requirement demands that premium levels are unlikely to be

capable of being relaxed”.

This would suggest the Club is clearly building up to a

renewal again with General increases.

For the 6th year in a row, the Club posted improvements in the underwriting result.

The Combined Ratio was 100.8%, well within the Clubs target of 105%. Also posting

a positive result on the financial side, the Club could add USD 18.8 million to the Free

Reserves that now stands at a comfortable USD 216. 2 million.

Tonnage by Vessel Type Tonnage by Area

www.westpandi.com

WEST OF ENGLAND

EUROPE

GREECE

AMERICAS

MIDDLE EAST & AFRICA

ASIA

3%2% 16%

45

GT million

OWNED/MUTUAL

CHARTERED/FIXED

TOTAL

49 51 53 57

20 15 18 22

69 66 71 79

220111 20122 20133 2014

Entered Tonnage

Supplementary Calls

Policy year 2005 2006 2007 2008 2009 2010 2011 2012 2013 20144

Original % 20 20 20 20 20 30 30 30 35 35

Final/Current 35 55 55 65 20 30 30 30 35 35

Free Reserves

2007 205

2008 174

2009 161

2010 169

2011 183

2012 179

2013 197

2014 216

S&P Rating

2011 BBBpi

2012 BBB-

2013 BBB

2014 BBB

USD million

TOTAL CALL

NET PREMIUM

TOTAL EXPENDITURE

UNDERWRITING RESULT

INVESTMENT INCOME

TOTAL FREE RESERVES

243 212 196 203

- 179 166 167

280 194 171 168

-37 -16 4 -1

45 10 22 20

183 179 197 216

2010/2011 2011/2012 2012/2013 2013/2014

USD million

West of England ConsolidatedFinancial YearSummary

WEST OF ENGLAND

46

47

Omni is a leading marine insurance broker

offering a wide range of marine insur-

ance products to its clients. The fixed

premium market is a considerable part of

our business, therefore it is important that we have

a good working relationship and co-operation with

these market players, which is beneficial for both our

clients as well as business partners.

The number of fixed premium P&I insurers today

is more than the numbers of Clubs in the Interna-

tional Group. Even within the International Group,

some of the Clubs, such as Skuld, West of England

and Britannia have already started offering terms on

a fixed premium basis for certain type of tonnages.

This comes with lower limits than the IG Clubs but

still sufficient enough for the trade of certain ship

owners. This comes with the added advantage of no

exposure to any unbudgeted calls.

Each of these insurers, where some act as underwrit-

ing agencies, have their small differences which can

make themselves attractive for certain type of busi-

ness. The ever increasing number of P&I insurers

provide huge capacity for the brokers which can make

a broker’s life both easy and difficult. Easy on the

fact that Brokers’ are able to make available several

choices for their clients. Difficult on the basis that it

is inevitable that some underwriters will be upset as

only one of them would be winning the business.

With ever increasing underwriting capacity of fixed

premium insurers nowadays it is not just small ton-

nages being targeted any more. Although the fixed

premium insurers face the threat by the names of

long established Group Clubs, at the same time the

International Group has started to lose business of

larger tonnage to those insurers outside the Group.

So the fight is fierce.

It will be a big challenge for insurers in this market to

make a living due to high competition and over time

some might be forced into consolidations. Only time

will tell and it is now time to do some business!

III. OTHER P&I FACILITIES INCLUDING FIXED PREMIUM MARKET

48

Initially a mutual insurer, British Marine was demutual-

ized in 2000 and as of 2005, the company is a wholly-

owned subsidiary of the QBE Group, a major international

insurance group. The written gross premium of British

Marine within QBE is around USD 100 million for 2013

whereas the same of the QBE Group is USD 17.9 billion

(compared to USD 18.4 billion in 2012).

As a commercial insurer British Marine offers fixed cost

insurance backed by QBE’s “A+” rated security, whilst

maintaining the tradition of mutual insurance by provid-

ing a high level of service to their clients.

In 2011 BML decided to withdraw from the Turkish mar-

ket, which already is a hot spot for many P&I insurers, and

to this date this continues. The company currently has

7,500 vessels entered for P&I with income of USD 100

million gross premium. It appears the number of vessels

had to come down from last year due to global competition

among the fixed premium insurers.

BML have joined forces with the QBE offices in Asia to

create a unified P&I product for the Far East. “QBE Asia

P&I” will deliver an enhanced P&I offering to our Far

East based Assureds, with underwriting, claims and ad-

ministration being handled by a combination of BM and

QBE staff, based in Singapore. The British Marine terms

and conditions and claims handling philosophy will be

used and the expertise of the BM London office and QBE

Asia offices will be called upon to enhance service to As-

sureds and Brokers.

BM also writes a substantial book of small vessels’ H&M

business (100% basis and in house claims and processing).

Founded in 1876, British Marine specialises in underwriting P&I, H&M and FD&D

insurances for small to medium sized ships up to GT 10,000 with the ability to go up to

GT 20-25,000 if the profile fits.

BRITISH MARINE

www.britishmarine.com

Tonnage by Vessel Type Tonnage by Area

GENERAL CARGO

EUROPE

FISHING

UNITISED

YACHT CENTRAL AMERICA

SCANDINAVIA

OTHER OTHER

TANKERS

SOUTH AMERICA

BULK CARRIERS

MIDDLE EASTTUGS AND BARGES

SMOOTHWATER

FAR EAST

NORTH AMERICA

49

T indall Riley also manages the Britannia P&I Club,

which primarily focuses on larger ships. Carina was

launched on 1 March 2013 offering standard P&I cover for

owners and charterers of up to USD 50 million or USD 500

million at the insured’s option and also a number of ad-

ditional covers such as Contractual, Specialist Operations,

and Legal Assistance and Defence Cover.

Carina’s underwriting and claims teams have considerable

experience in the small ships market. They are backed up

by Tindall Riley’s comprehensive support functions, in-

cluding accounts, IT, risk management and documentary

services. Carina has a network of over 400 correspondents

worldwide to provide advice and assist insured’s in rela-

tion to any claim or casualty.

Carina has seen a significant increase in the number of

ships insured and growth in written premium since last

year and it is noted that as at July 2014, 4,250 ships are

insured with total GT of 2 million.

Cover is provided to shipowners worldwide with a focus on

ships up to GT 5,000.

The majority of the business gained to date has been in Eu-

rope and Asia although there has also been support from

brokers and owners in South America. Carina does not

write US business and most of the tonnage insured is trad-

ing locally or on inland waterways. A bespoke Carina yacht

policy was launched on 1 January 2014, which provides com-

prehensive P&I cover for yacht owners trading worldwide.

Carina continues to develop its business further in its ex-

isting and new markets.

Carina is the trading name of certain Lloyd’s underwriters (rated A+ by S&P) and is managed

by Tindall Riley Marine (UK) Limited trading as Carina Managers.

www.carinapandi.com

Tonnage by Vessel Type Tonnage by Area

TUG AND

BARGES

FAR EAST

FISHING

PASSENGERVESSELS

OTHER

GENERAL CARGO

RUSSIA AND UKRAINE

EUROPE

SOUTH AMERICA

TANKERS

CARINA

50

Having been established to meet the demands of smaller ship operators and with

security provided by the American Club, Eagle Ocean Marine has continued to see

stable growth over the past year, building their book of business whilst maintaining a

conservative approach to underwriting.

EAGLE OCEAN

MARINE

Tonnage by Vessel Type Tonnage by Area

TUG AND BARGES

TANKERS

GENERAL CARGOOTHER

FERRY AFRICA

EUROPEMIDDLE EASTSOUTH

EAST ASIA

BULK CARRIERS FAR EAST ASIA

www.eagleoceanmarine.com

The American Club’s recent S&P upgrade from BB+ to

BBB- (stable) is expected to increase the Eagle Ocean

Marine product.

Eagle Ocean Marine can provide cover up to USD 100

million for P&I. The company has seen a steady growth

of premium income with an estimate of USD 7 million

for 2013-14 with number of vessels reaching 268. Entered

tonnage is currently GT 590.000. Eagle Ocean Marine

continues to have a strong presence in China and South

East Asia, following a commitment by the American Club

to increase its representation in the area. Eagle Ocean

Marine has also benefited from having the ability to issue

American Club guarantees, enhancing its claims handling

service and American Club blue cards, which are recog-

nized worldwide.

CONTAINER VESSELS

RO/RO FISHING

AMERICAS

51

HANSEATIC P&IHanseatic P&I is an insurance consortium founded in 2005 with initially German

insurers however as of 2012, Hanseatic introduced various Lloyd’s Syndicates to its

primary consortium to further strengthen their capacity.

www.hanseatic-pandi.com

Tonnage by Vessel Type Tonnage by Area

GENERAL CARGO

EUROPE

BULK CARRIERS

TANKERS

OFFSHORE

OTHER

CONTAINER VESSELS

MIDDLE EAST

FAR EAST

SOUTH AMERICA

TUGS AND BARGES

Today the primary consortium is made of ANV, Novae,

Navigators and Torus, Hiscox along with Uniqa Osterre-

ich Versicherungs AG.

The reinsurance carriers are Allianz Global Corporate &

Speciality AG, Swiss Re and Lloyd’s of London.

Since its establishment the consortium has been fully

managed by Zeller Associates Management Services

GmbH, Hamburg with a representative office in London.

Hanseatic P&I is able to provide P&I cover for all types

of vessels with a limit up to USD 500 million. The mar-

kets Hanseatic serve are Europe, Russia, Turkey, Middle

East, North Africa and recently expanded to include Far

East and Asian Regions.

The cover risk appetite of Hanseatic P&I and

FDD are small and medium size general cargo and con-

tainer vessels as well as liquid cargo tankers and dry

bulkers. Additionally Hanseatic has an excellent under-

writing expertise for traditional, offshore, ports and ter-

minals and specialist vessels of any type.

In 2013 the Hanseatic P&I insured GT 2.8 million and

had a premium incomwe of USD 19.5 million, which rep-

resents a similar performance compared to 2012.

All the insurers and reinsurers in Hanseatic’s consortium

have A or AA ratings by Standard’s and Poor.

FISHING

OTHER

52

Ingosstrakh has been established in 1947 as an administrative division of the USSR

Ministry of Finance and now serves as a multi-line national insurer and leader in the

Russian insurance market. Standard & Poor’s rating for Ingosstrakh is “BBB- stable”.

Tonnage by Vessel Type

INGOSSTRAKH

www.ingos.ru

Being the oldest insurance company in Russia, Marine

division of the company offers both H&M insurance (in-

cluding Loss of Hire and Builders’ Risks) and P&I cover

(including CL and FD&D). Ingosstrakh holds 44% of the

Russian P&I market.

Ingosstrakh provides a standard P&I cover on a fixed pre-

mium basis and it’s protected by a reinsurance program

placed with London and international reinsurers. Starting

as from 1st January 2014 Ingosstrakh has increased limit of

liability for P&I up to USD 1 billion and become the only

P&I insurer in the Russian marine market offering such

limits. H&M capacity also increased to USD 100 million.

Ingosstrakh’s current portfolio consists mainly of owners/

operators from Russia, East-European Countries and Tur-

key even though about two thirds of Ingosstrakh’s ton-

nage fly foreign flags.

In 2013 Ingosstrakh not being a member of IG P&I Clubs

was included into the list of approved insurers in accord-

ance with the Notification of Ministry of Shipping of India.

Ingosstrakh covers a wide range of ships, from very small

inland operation vessels through to larger (in excess of GT

20,000) ocean going vessels. Ingosstrakh accepts various

types of vessels, but avoids passenger vessels carrying more

than 1,000 passengers or US flagged or crewed vessels.

In 2013 Ingosstrakh overall gross premium (including non-

marine) exceeded USD 2 billion. Marine claims for the

same period were settled in the amount of USD 26 million.

Tonnage by Area

RUSSIA

OTHER

UKRAINE

ST.VINCENT

CAMBODIA

BELIZE AZERBAIJAN

ST KITTS AND NEVIS

PANAMA

TUG AND BARGES

BULK CARRIERS

REEFER

TANKERS

FISHING

PASSENGER VESSELS

RO/RO

YACHTOTHER

DRY CARGO

CONTAINERVESSELS

53

Tonnage by Area

EUROPE

MIDDLE EAST

NORTH AMERICA

OTHER

Lodestar Marine is one of the newest and dynamic operations providing P&I Fixed

Premium Insurance solutions to owners, charterers and operators of small to medium

sized and specialist ships, including yachts, since late 2012.

www.lodestar-marine.com

LODESTARMARINE

It also provides shipowners and operators with additional

covers including Charterers Liability, Specialist Opera-

tions, Contractual Liabilities, Shipowners Liability (SOL),

Salvors’ Liability, War Risks and Defence Costs (FD&D).

Security of up to USD 100 million is provided by RSA,

with Lloyd’s of London and company market providing

further “A” rated security for limits up to USD 500 million

(USD 400 million in excess of USD 100 million).

In 2013, Lodestar has successfully written 1,700 vessels

with approximately GT 2.5 million producing a gross in-

come of USD 25 million. As of mid 2014 Lodestar has also

started offering hull and machinery and war risks insur-

ance however the security (in place of RSA) is via vari-

ous Lloyd’s syndicates currently being Ascot, Hardy and

Canopius as the leads. Lodestar is able to write large bulk

carriers up to 30,000 and it’s expected in time that they

will look at larger vessels as well.

The success of Lodestar is down to the strength of their

service and the experienced team. It is also noteworthy

that they have been accepted as a credible player in the

P&I market by major charterers and port authorities.

Tonnage by Vessel Type

CONTAINER VESSELS

GENERAL CARGO

FISHING OTHER

BULKCARRIERS

OFFSHORE

YACHT

TUGS AND BARGES

PASSENGERVESSELS

TANKERS

FAR EAST AND INDIA

SOUTH AMERICA

8%

54

Tonnage by Vessel Type Tonnage by Area

GENERAL CARGO

EUROPE

OTHER

TANKERS

OTHER

BULK CARRIERS

ASIA

TUG AND BARGESSOUTH AMERICA

MIDDLE EAST

CENTRAL AMERICA

www.navpandi.com

Navigators P&I is part of the Navigators Group, an international specialty insurance

holding company, with a strong competitive position and brand name in the marine

insurance segment of the property/casualty insurance industry.

NAVIGATORS

The group has solid underwriting expertise in its special-

ized niche and is one of the leading underwriters in the

U.S. and global marine insurance markets. Headquartered

in New York City, Navigators has offices in major insur-

ance centers in the United States, the United Kingdom

and Continental Europe, the newest office opened being

in Copenhagen. It also owns and operates Lloyd’s Syndi-

cate 1221.

The Group is very solid, with total assets in excess of USD

4 billion and gross written premium of USD 1.37 billion in

2013 and a statutory surplus of USD 804 million. It must

be noted that the Group is involved in many lines of busi-

ness such as Marine & Energy, Property and Casualty,

Management and Professional Liabilities. The combined

loss and expense ratio of marine business for both US and

UK offices is 87.3%.

Navigators, specialising on smaller tonnage and restricted

trading limits, has certain variations, exclusions under

their rules when compared to other similar insurance

providers. They think in their view these risks not to be

so important for the vessels they target, however we rec-

ommend the shipowners to check these exclusions with

their brokers if it suits their business. We also think it

is important to mention that among other fixed premium

providers that they do not require steel preloading surveys

to be carried out.

The P&I operations of Navigators are based in London

and insure about 1,600 vessels of about GT 2 million and

posted premium income for 2012 of USD 22 million. It in-

sures any type of vessels except passenger vessels, private

pleasure / yachts or US flagged vessels. Limit of liability

provided is USD 500 million and can insure vessels up to

GT 10,000 but exceptions made when larger vessels form

part of a fleet.

The Group has “A” Excellent by A.M. Best and A Strong

by Standard and Poor’s.

55

www.osprey-uwr.co.uk

Osprey has been established as an Underwriting Agency since 1991.

Head Office in London, a short distance from the Lloyd’s

of London Building, Osprey is the oldest provider of fixed

premium Protection and Indemnity Insurance (P&I) in

the London market.

Osprey Underwriting is able to offer P&I, Hull insurance

and Hull and P&I War Risks Insurance solutions to the

commercial marine industry.

Coverage is provided worldwide to owners of smaller craft

and vessels on a fixed limit, fixed premium basis. Osprey

covers a large variety of vessels from tugs &barges, offshore

supply vessels to submarine and research vessels. Dry car-

go vessels are covered up to GT 25,000 with a limit up to

USD 500 million any one accident or occurrence. However

hull limit is reduced to USD 5 million and USD 1 million

for IV showing their concentration on small crafts.

Coverage available to assured operating worldwide includ-

ing USA.

Osprey is an Agent of Underwriters at Lloyd’s and is au-

thorised under the terms of Binding Authorities to under-

write and administer claims on behalf of those supporting

Lloyd’s Underwriters. All Osprey products are Lloyd’s se-

curity. Lloyd’s of London is A+ rated by S&P, AM Best

and Fitch Rating Agencies.

The Agency has the ability to provide Lloyd’s letters of

Undertaking and access to a Bank Guarantee facility in the

event Security is required in a claim context.

Tonnage by Vessel Type Tonnage by Area

TUG AND BARGES

USA

PASSENGER/PLEASURE

CRAFT

MARINE CONTRACTERS

OTHER

CARRIBEAN

SOUTH AMERICA

AFRICA

OILFIELD

EUROPE

FISHING VESSELS

OSPREY

DRY CARGO

ASIA

56

RaetsMarine, founded in 1993, is a fixed premium P&I insurer with head office in Rotterdam

and subsidiaries in Paris, London and Singapore. RaetsMarine forms part of the Amlin Group.

Tonnage by Vessel Type Tonnage by Area

EUROPE

OTHER (SPECIALIST CRAFT)

SOUTH AMERICA

OTHER

YACHT

PASSENGER VESSELS

TANKERS

GENERAL CARGO

TUG&BARGES

BULKER CARRIERS

MIDDLE EAST

FAR EAST

FISHING VESSELS

RAETS MARINE

www.raetsmarine.com

RaetsMarine operates worldwide and targets small to me-

dium sized cargo vessels and has a special interest in in-

suring specialist craft. Products can be tailored to specific

needs and combination of products can be made by which

they aim to provide optimum service and support to their

clients. There are no restrictions as to vessel age and sin-

gletons will be quoted.

The P&I business forms 60% of the total business. In

2013 Raets covered GT 169 million / 47,200 vessels being

combined figures for both owned and chartered tonnage.

The anticipated combined premium turnover is expected

to be USD 90 million. RaetsMarine provides limits up to

USD 500 million.

RaetsMarine is one of the market leaders in Charterer’s

Liability Insurance. RaetsMarine can handle any type of

charterer and provides limits up to USD 500 million.

Amlin Europe N.V. has A- (stable) by Standard and Poor’s

and A+ (stable) by Fitch.

(Both numbers relates to any vessels entered irrespective

of time and not on annual pro rata basis)

18%

22%

57

Established in 1921, Rosgosstrakh Group of companies (RGS) is a major insurance

player in the Russian market with more than 45 million individuals and 240,000

corporate clients from all over the country.

www.rgs.ru

RGS has more than 100 000 personnel working from 83 re-

gional branches and 3 500 offices throughout Russia. The

group also comprises of Rosgosstrakh Bank.

RGS is the 81st largest company in Russia according to

Russian Rating Agency Expert Ra. It’s also the market

leader in terms of premium collected among Russian In-

surance companies, and as of 2012 also second in terms of

premium collected when it comes to Marine Insurance.

(USD 26 million in 2013 which is slightly higher than

2012).

RGS is rated BB-/ruAA- (Outlook stable) by S&P and has

been given the highest rating by Expert Ra (A++). P&I

portfolio is now reached almost GT 1.5 million , serving

the client with a P&I capacity of USD 500 million, placed

with reinsurers rated not less than A+ by S&P.

With the enhancement of the marine division in 2007,

RGS has developed a highly professional team of marine

claims handlers who have an average of 16 years hands-on

experience.

RGS also implemented an electronic claims system

named GURU similar to Lloyd’s (X-changing). RGS set-

tles around 300 marine claims a year, from personal injury

to catastrophic losses and complex General Average cases

with multiple parties involved. The total amount of reim-

bursements paid to the clients for the last three years is

estimated USD 45 million.

ROSGOSSTRAKH

Tonnage by Vessel Type Tonnage by Area

TANKERS

PASSENGER VESSELS

OTHERRO/RO

SUPPLY BOATS

ICE BREAKER

RUSSIA

BELIZE

CAMBODIA

OTHER

PANAMA

TUGS AND BARGES

DRY/GENERAL

CARGO

BULKER

RESEARCH

11%

58

Turk P& I Sigorta A.S. was established in December 2013 in order to ensure that all

cabotage ships have liability insurance with appropriate limits in accordance with the

international conventions.

Tonnage by Vessel Type

TUGS

FAST FERRY

PLEASURE CRAFT

OTHER DRY CARGO

PASSENGER FERRY

RO/RO

CAR FERRY

TURK P&I

www.turkpandi.com

It is owned by a consortium of six companies, three marine

related service providers (Omur Denizcilik A.S., Vitsan

Denizcilik A.S. and Metropole Denizcilik) and three state

owned insurance companies (Ziraat Sigorta A.S., Halk Sig-

orta A.S. and Gunes Sigorta A.S.) The Government does

not have a shareholding but have a representative on the

board of the company.

Turk P&I has been founded to provide Fixed Premium

Insurance solutions to vessels engaged primarily in cabo-

tage trade. Its portfolio consists mainly of owners/opera-

tors of small to medium sized ships however, it also has

insurance solutions to specialist ships, including passen-

ger crafts, yachts, diving boats and fishing vessels as well.

The P&I cover is protected by a reinsurance program with

limit of liability of up to USD 500 million.

The underwriting team consists of five underwriters and

from 20.02.2014 they welcomed 53 new Assured operating

324 vessels of various types. Turk P&I now works with 10

brokers on a global basis. The company has written USD

4.5 million premium within 3 months.

Besides providing insurance coverage to the cabotage

sector, Turk P&I has the goal of sharing information and

experience with the sector members and the Company is

working closely together with the government in achiev-

ing this goal.

Turk P&I offers its experiences to the Turkish Shipping

sector and became a leader in Turkish insurance market

by giving the best-quality P&I insurance product with the

highest-level liability limits.

59

60

61

62

NOTES

63

NOTES

64

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

Under no circumstances shall Omni Ltd. be responsible or liable for any loss or damage caused directly or indirectly by the use of this information.

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