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AMERICAN CLUB ANNOUNCES MODEST GENERAL INCREASE FOR 2016 POLICY YEAR: P&I PREMIUM TO RISE BY 2.5%, BUT NO INCREASE FOR FD&D

RELEASE CALL MARGINS FOR 2013 AND 2014 POLICY YEARS REDUCED: CURRENT YEAR TO BE REVIEWED IN FIRST HALF OF 2016

Premium uplift by international P&I insurer in line with current market trends 

NEW YORK, NOVEMBER 23, 2015:     At its meeting in New York on 20th November, the American Club’s board resolved to levy a general premium increase of 2.5% for P&I cover, but no increase in the cost of FD and D for the 2016 policy year. The club’s board also reviewed release call requirements for open policy years, significantly reducing the margins for 2013 and 2014, and undertaking to revisit the 2015 figure in the first half of 2016.

In reaching these decisions, the Board took account of the Club’s recent performance against a background of the overall economic climate, the outlook for the freight and investment markets and the implications of emerging trends within the P&I environment.

In a circular released to its members, the American Club said that, over the last twelve months, the “churn effect” (the term applied to the reduction of premium volume as older, higher-rated vessels are replaced by newer, lower-rated ships) had had a more subdued impact upon revenue than was the case from 2012 through 2014. Indeed, the average net rate per ton for the Club’s P&I entries was only 2% lower than it had been twelve months earlier, despite unrelenting pressure on premium pricing over that time. The Club also remarked that claims development for the 2015 policy year had been favorable to date as to both retained losses and those covered by the International Group’s pooling arrangements for larger claims.

In commenting on these developments and the outlook for the industry in general, Joe Hughes, Chairman and CEO of the American Club’s managers, Shipowners Claims Bureau, Inc., said:

“Price increases, however modest, are never welcome, particularly at a time when the freight markets continue to struggle.  Nevertheless, the board remains resolute in its commitment to consolidate the financial standing of the American Club, particularly in light of the progress it has made in recent years.

Let us hope that the outlook for shipping will improve as the global economy expands in 2016 and beyond. However, apart from the tanker sector and certain other specialist trades, the freight markets have yet to experience any sustained growth.

As to the prospects for P&I generally, pressure on premium pricing is likely to continue, given the difficulties facing shipowners at large. On the claims front, the severity of attritional losses will probably increase, even if their frequency continues to diminish, while the size and volatility of large claims are unlikely to abate,” Hughes concluded.

ENDS

Notes to Editors

American Club Circular

Full details of the American Club’s Circular number 41/15 dated November 20, 2015 can be found here http://www.american-club.com/files/files/cir_41_15.pdf

Highlights of Circular number 40/15

  • 2013 much improved by comparison with the position twelve months earlier. Release call reduced from 20% to 7.5% over and above the current estimated total premium for the year. Year expected to be closed in June 2016 in accordance with original budget.
  • 2014 exhibiting a deficit, but likely to improve toward closure expected in the first half of 2017.  Release call reduced from 20% to 12.5%.
  • 2015 developing well within initial expectations, release call to be maintained, for the time being, at 20%, but to be reviewed during the first half of 2016.
  • 2016 renewal to feature a 2.5% general increase on expiring estimated total premium for P&I entries.
  • 2016 renewal to feature a zero general increase for FD&D entries.
  • 2016 renewal also to feature increases in, and minimum levels of, certain deductibles, as well as of deductibles for certain P&I risks.

The American Club

American Steamship Owners Mutual Protection and Indemnity Association, Inc. (the American Club) was established in New York in 1917. It is the only mutual Protection and Indemnity Club domiciled in the entire Americas and its headquarters are in New York, USA.

The American Club has been successful in recent years in building on its US heritage to create a truly international insurer with a global reach second-to-none in the industry. Day to day management of the American Club is provided by Shipowners Claims Bureau, Inc. also headquartered in New York.

The Club is able to provide local service for its members across all time zones, communicating in eleven languages, and has subsidiary offices located in London, Piraeus, Hong Kong and Shanghai, plus a worldwide network of correspondents

The Club is a member of the International Group of P&I Clubs, a collective of thirteen mutuals which together provide Protection and Indemnity insurance for some 90% of all world shipping.

For more information, please visit the Club’s website http://www.american-club.com/

P&I Insurance

Protection and Indemnity insurance (commonly referred to as “P&I”) provides cover to shipowners and charterers against third-party liabilities encountered in their commercial operations; typical exposures include damage to cargo, pollution, death/injury or illness of passengers or crew or damage to docks and other installations

Running in parallel with a ship’s hull and machinery cover, traditional P&I cover distinguishes itself from usual forms of marine insurance by being based on the not-for-profit principle of mutuality where Members of the Club are both the insurers and the assureds.

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American Club announces investment in new Cyprus-based hull insurance company – American Hellenic

New company’s experienced executives, having worked more than twenty years in the hull & machinery insurance market, will now serve customers through an expanded global presence from offices in New York, London, Piraeus, Cyprus, Hong Kong, Shanghai, and Dalian.

NEW YORK, OCTOBER 2, 2015: The American Club has announced a strategic investment in a new Cyprus-based hull insurance company, American Hellenic Hull Insurance Company, Ltd. (American Hellenic), as part of its continuing global expansion and diversification initiative. The new company will be managed by an experienced team of executives with over twenty years in the hull & machinery insurance market. The American Club’s investment will allow further expansion into the global hull & machinery segment enabling it to offer high quality insurance services and innovative customer solutions.

A Witte June 15 #

Arnold Witte, Chairman of the American Club’s Board of Directors

American Hellenic will be a Cyprus-based and licensed, Solvency II compliant, wholly-owned American Club subsidiary. It will be managed from Piraeus, Cyprus and New York, utilizing the expertise of long-standing professionals in the marine insurance market and will be serviced through specialists in offices located in seven major global shipping hubs with the ability to provide local market know-how and service to its customers, and to communicate in no less than eleven languages.

The American Club will now not only be able to continue offering first class marine protection and indemnity cover, but also, through its new subsidiary American Hellenic, will provide an expanded product line of marine insurance including hull & machinery, war risk, and mortgagee interest insurance.

Chairman of the American Club’s Board of Directors, Arnold Witte, in highlighting the significance of this strategic investment, said: “The Board of Directors carefully assessed the value of this business opportunity and voted unanimously in favor of supporting the American Hellenic hull insurance initiative. This is an historic moment in the Club’s long history and, through the dedication and ingenuity of the Club’s Managers and Board Directors, sparked by the idea of Board member Angelos Kostakos, represents a unique opportunity to prudently expand our market footprint, and bodes well for the future of the American Club.”

Vincent Solarino, President and COO of Shipowners Claims Bureau, Inc., Managers of the American Club also stated: “American Hellenic is an investment in the American Club’s future and is yet a further step in expanding and diversifying the Club’s product line. It is part of the Club’s overarching plan to significantly increase its revenue across a growing range of product lines, its tonnage across all lines, expand its market presence, while increasing its S&P rating. This is possible because the Club’s Directors and Managers have the grit, determination and initiative to make it happen”.

Joe Hughes, Chairman and CEO of the American Club’s Managers, concluded his colleagues’ remarks in saying: “This is one of the most significant developments in the American Club’s recent history. The transaction proceeded with the close and active cooperation of the Board of Directors of the American Club. I am certain that American Hellenic will prove to be a powerful force of growing energy within the international marine insurance industry. 

Notes to Editors

The American Club was founded in February 1917. In addition to its US headquarters in New York, the club is able to provide local service across all time zones, communicating in 11 languages, with subsidiary offices in London, Piraeus, Cyprus, Hong Kong, Shanghai and Dalian, and a worldwide network of correspondents. 

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Eagle Ocean Marine continues to grow market share

Robust development of recent years supported by strong operating results: Mutual club pedigree enhances Insurer’s stature in fixed premium sector

The American Club

Joe Hughes, Chairman and CEO of Eagle Ocean Agencies, Inc.

NEW YORK, JULY 20, 2015: Eagle Ocean Marine (EOM) – the specialist fixed premium P&I and FD&D (Freight, Demurrage and Defense) facility underwritten by the American Club – has reported a solid fourth year of operations, and a strong start to its fifth year of activity, following the successful renewal of its quota-share and excess of loss reinsurances with Lloyd’s underwriters as of July 1, 2015.

Over the past year, tonnage insured by Eagle Ocean Marine grew by nearly 20% over the figure for the previous twelve months, on a premium income of over $6 million. In addition, steadily rising levels of inquiries and orders indicate a promising outlook for EOM’s future development, despite strong competition in the sector.

At the operating level, EOM has continued to perform very well. Both the incidence and severity of claims has remained low, reflecting a prudent policy of risk selection and premium pricing. Results to date indicate a cumulative combined ratio of below 70%, connoting strong profitability for the Club and its reinsurers. This, together with confidence in EOM’s prospects generally, informed the recent renewal of the facility’s reinsurances which were completed on positive terms.

EOM supplies P&I and FD&D cover for the operators of smaller ships in local and regional trades. Providing P&I cover of up to $500 million per risk, it is aimed at owners who do not require, owing to the characteristics of their trade, the high limits of cover provided by the mutual system, and who prefer a fixed premium approach to their insurance needs.

EOM insures ships from all over the world except the United States. More than 70% of its business is derived from Asia, with the remainder originating for the most part from Europe, Latin America and Africa. The facility’s tonnage by vessel type is broadly based, made up of tankers, general cargo vessels, bulk carriers and tug and barge business in approximately equal shares.

Speaking in New York recently, Joe Hughes, Chairman and CEO of Eagle Ocean Agencies, Inc. which operates the facility, was upbeat:

“We are very pleased that Eagle Ocean Marine continues to do well. Its recent years’ results have been excellent: premium income, market share and operating results all continue to exhibit a positive trajectory, and augur well for the future. The recent increase in the limit of cover available under the facility to $500 million will continue to make it an attractive option to those who prefer a fixed premium solution to their P&I needs. We are determined to make EOM a growing success for all its stakeholders: its insureds, the Club, its reinsurers and its many other business associates.

“We continue to take the long view when it comes to developing market share. The EOM business model is based on careful risk selection, sensible pricing, effective loss prevention and unsurpassed claims service. It is inspired by the traditions of classic P&I mutuality. EOM seeks to occupy a special place in the fixed premium sector for those who desire a gold standard of service. We are confident that EOM will enjoy increasing success over the years ahead,” Hughes added.

Notes to Editor 

The American Club

American Steamship Owners Mutual Protection and Indemnity Association, Inc. (the American Club) was established in New York in 1917. It is the only mutual Protection and Indemnity Club domiciled in the entire Americas and its headquarters are in New York, USA.

The American Club has been successful in recent years in building on its US heritage to create a truly international insurer with a global reach second-to-none in the industry. Day to day management of the American Club is provided by Shipowners Claims Bureau, Inc. (SCB) also headquartered in New York. Eagle Ocean Agencies, Inc. an affiliate of SCB, manages the Eagle Ocean Marine (EOM) fixed premium brand of the Club’s business.

The Club is able to provide local service for its members across all time zones, communicating in eleven languages, and has subsidiary offices located in London, Piraeus, Hong Kong, Shanghai and Dalian, plus a worldwide network of correspondents

The Club is a member of the International Group of P&I Clubs, a collective of thirteen mutuals which together provide Protection and Indemnity insurance for some 90% of all world shipping.

For more information, please visit the Club’s website http://www.american-club.com/
P&I Insurance

Protection and Indemnity insurance (commonly referred to as “P&I”) provides cover to shipowners and charterers against third-party liabilities encountered in their commercial operations; typical exposures include damage to cargo, pollution, death/injury or illness of passengers or crew or damage to docks and other installations.

Running in parallel with a ship’s hull and machinery cover, traditional P&I cover distinguishes itself from usual forms of marine insurance by being based on the not-for-profit principle of mutuality where Members of the Club are both the insurers and the assureds.

FD&D Insurance

FreightDemurrage & Defense insurance, often referred to as “FD&D” or simply “Defense,” provides members with cover for claims handling assistance and for legal costs in relation to a wide range of disputes. Such disputes are outside the scope of P&I or H&M (Hull and Machinery) insurance and arise from the building, buying, selling, owning or operation of a vessel.

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American Club Managers announce new Global Business Development Director and other appointments and promotions

New roles strengthen and enhance the Club’s capabilities across the globe

New York, 16th July, 2015:

Shipowners Claims Bureau, Inc., which manages international P&I insurer the American Club, has recently announced new appointments and promotions at its offices in Greece, the United Kingdom and China:

  • Dorothea Ioannou, Managing Director of SCB (Hellas) Inc., assumes the role of Global Business Development Director, the first woman in the American Club’s history to do so
  • Joanna Koukouli promoted to Claims Manager for the Club’s Piraeus office
  • Marivi Banou appointed as Deputy Claims Manager in Piraeus
  • Maria Mavroudi joins the Piraeus office as Business Development and Claims Executive
  • Gustavo Gomez promoted to Claims Liaison Manager in London
  • Katherine (Kat) Wang joins as Marketing Manager for Greater China and North Asia
Dorothea Ioannou, The American Club

Dorothea Ioannou, Global Business Development Director, The American Club

The chief focus for Dorothea Ioannou as Global Business Development Director will be to coordinate business development efforts across all regions of the world, fostering current relationships and generating new initiatives for the American Club and its Eagle Ocean Marine (EOM) fixed premium facility. She is the first woman in the history of the American Club and its Managers to have been appointed to such a high-level executive role. Dorothea is Vice President of WISTA, Hellas, and will maintain her position as Managing Director of the Piraeus office of SCB (Hellas) Inc.from where she will also fulfil her new duties.

Joanna Koukouli, the new Claims manager in Piraeus, obtained her first degree in law from the Aristotle University in Thessaloniki before gaining an LLM in maritime law from the University of Southampton in the United Kingdom. Joanna is a member of the New York State Bar, the Law Society of England and Wales and the Piraeus Bar Association.

Marivi Banou, the new Deputy Claims Manager in Piraeus, joined SCB (Hellas) in 2005 having previously worked in both insurance broking and ship management. She holds a degree in shipping and transport from BCA College in Athens, in association with the Metropolitan University of London.

Maria Mavroudi, the new Business Development and Claims Executive in Piraeus, joins the American Club from another major International Group club and related service provider. A graduate of the University of Piraeus and the Cass Business School of the City University in London, Maria is an associate member of the Association of Average Adjusters with broad knowledge of the marine insurance sphere at large.

Gustavo Gomez, the new Claims Liaison Manager in London, is a well-known figure in the London marine community and has worked in the Managers’ London office for several years. Having qualified as a lawyer in his native Mexico, Gus worked in P&I correspondency before becoming regional director for a local maritime law firm. He holds a Master’s Degree in law from the University of Southampton in the United Kingdom.

Katherine (Kat) Wang, the new Marketing Manager for Greater China and North Asia, holds a Master’s Degree in International Shipping and Logistics from Hong Kong Polytechnic University. Prior to joining the Managers’ operations in China, Kat worked for China Shipping, Hong Kong and latterly for the local office of a major Scandinavian P&I club where she gained extensive underwriting experience.

Joe Hughes, Chairman & CEO, Shipowners Claims Bureau, Inc., Managers for the American Club commented:

“Members and the Club’s many other friends will no doubt join the Managers in wishing our colleagues the best of good fortune in their new roles, in which they are committed to the pursuit of exceptional Member service in every element of their growing responsibilities.”

The American Club recently reported solid progress during 2014 at the annual meeting of its members held in New York last month reporting that, despite a challenging economic climate, the Club’s business had developed favourably and 2015 had started on a positive note.

Notes to Editors

The American Club

American Steamship Owners Mutual Protection and Indemnity Association, Inc. (the American Club) was established in New York in 1917. It is the only mutual Protection and Indemnity Club domiciled in the entire Americas and its headquarters are in New York, USA.

The American Club has been successful in recent years in building on its US heritage to create a truly international insurer with a global reach second-to-none in the industry. Day to day management of the American Club is provided by Shipowners Claims Bureau, Inc. also headquartered in New York.

The Club is able to provide local service for its members across all time zones, communicating in eleven languages, and has subsidiary offices located in London, Piraeus, Hong Kong, Shanghai, and Dalian, plus a worldwide network of correspondents.

The Club is a member of the International Group of P&I Clubs, a collective of thirteen mutuals which together provide Protection and Indemnity insurance for some 90% of all world shipping.

For more information, please visit the Club’s website http://www.american-club.com

P&I Insurance

Protection and Indemnity insurance (commonly referred to as “P&I”) provides cover to shipowners and charterers against third-party liabilities encountered in their commercial operations; typical exposures include damage to cargo, pollution, death/injury or illness of passengers or crew or damage to docks and other installations.

Running in parallel with a ship’s hull and machinery cover, traditional P&I cover distinguishes itself from usual forms of marine insurance by being based on the not-for-profit principle of mutuality where Members of the Club are both the insurers and the assureds.


 

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The American Club reports solid progress in 2014 despite challenging business climate

International P&I insurer continues positive trend into 2015

NEW YORK, JUNE 18, 2015: The American Club reported solid progress during 2014 at the annual meeting of its members held in New York today. Despite a challenging economic climate, the Club’s business had developed favorably, and 2015 had started on a positive note.

The American Club

Joe Hughes, Chairman and CEO of the American Club’s managers, Shipowners Claims Bureau, Inc.

Tonnage and revenue grew strongly at the outset of 2014, but faded slightly later in the year as freight markets struggled. However, premium pricing remained firm, despite the enduring effect of “churn” as older, higher-rated vessels continued to be replaced by younger, lower-rated ships.

Claims for the Club’s own account had developed at a moderate pace during 2014, extending the favorable trend of recent years. International Group pool claims were also showing a benign emergence at year-end.

Net premiums earned during 2014 were about 5% higher than the figure for the previous year, although total income was down slightly, to $102.3 million, owing to a lower realized investment gain. Incurred losses, at $65.9 million, were marginally higher than the $65.1 million recorded for the previous year.

After-tax comprehensive income for the year was $1.3 million, generating an increase in total members’ equity to $58.6 million as of December 31, 2014, 1% higher than the figure a year earlier. Statutory surplus grew to $64.8 million at year-end, compared with $63.6 million for 2013.

The Club’s investment earnings provided a solid contribution to its overall results. Its fixed income portfolio performed well during 2014 so that, despite lower stock market returns, an overall gain of just under 4% was achieved, bettering relevant benchmarks.

The trends noted in 2014 were asserting themselves with growing vigor into 2015. As of March 31, 2015, the Club’s statutory surplus had increased by 9% to $71 million, while its GAAP (Generally Accepted Accounting Principles) free reserves were up 11% to $65 million. Statutory free reserves per ton were approximately $4.65 at year-end 2014. A further increase, to $5.03, was recorded by the end of the first quarter this year.

Members were also told that the 2012 policy year was being closed as originally budgeted. The small deficit for the year of just over $3 million would be subvented by the Club’s contingency fund which stood at a record figure of nearly $90 million as of March 31, 2015.

Eagle Ocean Marine (EOM), the American Club’s fixed premium facility, which focuses on the operators of smaller vessels in local and regional trades, was also performing well, making a strong contribution to overall results. EOM continued to expand its market footprint during 2014, particularly in Asia. EOM’s combined ratio to date was less than 70%, testimony to its prudent approach to risk selection. This holds the promise of growing success over the years ahead.

In assessing the performance, the Club’s Chairman, Arnold Witte of Donjon Marine Co., Inc., said: “2014 was a difficult year, not least for the shipping community itself. Nevertheless, the American Club made excellent progress. This is being sustained into 2015.”

He continued: “Many challenges lie ahead. The slump in the dry bulk markets continues to cause concern. It is to be hoped that freight rates will rise decently, at least over the medium term, as the global economy improves. The Board remains optimistic about the future and the Club will remain committed to an exceptional level of solidarity with its members.”

Joe Hughes, Chairman and CEO of the American Club’s managers, Shipowners Claims Bureau, Inc., added: “Notwithstanding a difficult business environment, 2014 was a good year. Claims exposures continued to develop favorably, premium pricing stayed firm and investments performed well. In addition EOM saw its profits rise, the Club’s surpluses increased and free reserves per ton strengthened considerably. Our loss prevention and ERM (Enterprise Risk Management) initiatives advanced energetically and our service capabilities were expanded. These positive trends have continued into 2015. It is especially encouraging to see a further increase in the Club’s surplus during the first quarter.”

Mr. Hughes concluded: “The Club’s recent progress will provide a firm foundation for the further development of our agenda over the years ahead. Its business plan anticipates a range of exciting opportunities to expand its outreach further throughout the global maritime community. In this, as in everything else it does, the American Club stands ready to embrace the challenges of a changing world and growing competitive pressures.”

Summary of Annual Results – 2014 Financial Year

  • Net premium income rises by 5% to $94.2 million
  • Total income down marginally to $102.3 million
  • Losses almost static at $65.9 million
  • After tax comprehensive income $1.3 million
  • Members’ equity at $58.6 million
  • Statutory surplus up 2% at $64.8 million

Other Highlights:

  • Statutory surplus up 9% to $71 million as of end Q1 2015
  • 2015 year-to-date retained claims developing modestly
  • Average 5 year pure loss ratio of business renewed at February 20, 2015 improves to 53% compared with 57% a year earlier
  • 2012 yet another policy year being closed as originally budgeted
  • Eagle Ocean Marine grows market footprint with solid profitability

ENDS

Notes to Editors

The American Club

American Steamship Owners Mutual Protection and Indemnity Association, Inc. (the American Club) was established in New York in 1917. It is the only mutual Protection and Indemnity Club domiciled in the entire Americas and its headquarters are in New York, USA.

The American Club has been successful in recent years in building on its US heritage to create a truly international insurer with a global reach second-to-none in the industry. Day to day management of the American Club is provided by Shipowners Claims Bureau, Inc. also headquartered in New York.

The Club is able to provide local service for its members across all time zones, communicating in eleven languages, and has subsidiary offices located in London, Piraeus, Hong Kong and Shanghai, plus a worldwide network of correspondents.

The Club is a member of the International Group of P&I Clubs, a collective of thirteen mutuals which together provide Protection and Indemnity insurance for some 90% of all world shipping.

For more information, please visit the Club’s website http://www.american-club.com/

The full Annual Report 2014 for the American Club can be accessed on its website – http://www.american-club.com/page/annual-report
P&I Insurance

Protection and Indemnity insurance (commonly referred to as “P&I”) provides cover to shipowners and charterers against third-party liabilities encountered in their commercial operations; typical exposures include damage to cargo, pollution, death/injury or illness of passengers or crew or damage to docks and other installations.

Running in parallel with a ship’s hull and machinery cover, traditional P&I cover distinguishes itself from usual forms of marine insurance by being based on the not-for-profit principle of mutuality where Members of the Club are both the insurers and the assureds.

 

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