The thirteen P&I Clubs which comprise the International Group between them provide marine liability cover for approximately 90% of the world’s ocean-going tonnage. In their recently released Annual Review 2017/18, Hugo Wynn-Williams, Chairman made the following statements in his introduction:
Tonnage up — reinsurance cost down
Another increase in Group-entered tonnage, and a fourth year of savings in the cost of the Group reinsurance purchase, albeit more modest than in recent years, were among the notable and welcome features of 2017/18 for
the Group clubs and their shipowner members.
World fleet growth continues to slow
World fleet growth continued to slow during 2017/18, from just under 4% to just under 3% as at July 2018, a far cry from the 8-9% growth rates experienced in 2010-12. Total Group-entered tonnage as at February 2018 had
increased to just over 1.209 billion GT, up from 1.16 billion GT a year earlier.
Freight markets continue to challenge
The freight markets have experienced a modest upward trend in the year to July 2018, with the ClarkSea index rising to just under US $12,300 from below US $10,000 a year ago. Liner and Capesize rates have shown the
most significant improvements by sector, but challenging times persist with volatility in all sectors.
Seaborne trade, however, continues to grow (2017 just over 4% and 2018 forecast 3.2%) with predictions of increased growth in all trade sectors.
Group Correspondents conference
As reported later in the Review, the fifth quadrennial International Group Correspondents conference was held in London in September 2017. The event was very well attended by representatives from correspondents around the globe. Club correspondents fulfil a crucial role as the “eyes and ears” of the Group clubs in almost 700 ports worldwide, and they also advise on, and represent, the interests of Group clubs and their shipowner members, thereby helping to streamline local procedural requirements and to minimise local operational delays for shipowners. The quadrennial conference provides an opportunity for correspondents to meet each other and the
clubs and discuss a broad range of topical issues impacting on shipowners, clubs and correspondents alike.
During 2017, the Group commissioned a market research survey in order to gain an insight into perceptions and understanding of the Group from a wideranging stakeholder audience, including from within the Group club managers
themselves. This exercise was completed in the early summer of 2017 and provided very useful feedback on what the Group and clubs do well, and where there is room for improvement to make the system work better. The “takeouts”
from this review were considered by senior club managers at a series of dedicated and externally facilitated strategy meetings held in Oslo in June 2017, which resulted in the establishment of a number of core high-level working groups looking at fundamental areas of operation of the Group, including the workings of the International Group Agreement (“IGA”), the scope of claims pooling, internal administration and governance within the Group and branding and communications. During 2017 and 2018, these working groups have made significant progress in addressing these core areas and the progress and future work programmes for these working groups were discussed at further strategy meetings in Newcastle in June 2018.
Uncharted waters ahead
The last three years have presented both challenges and opportunities for the Group, with significant focus areas, including the implications for clubs and shipowners of global sanctions measures, working with regulators and maritime authorities to address the problems arising out of cargo liquefaction, and helping shipowners to meet the financial security requirements under the Maritime Labour Convention. But, equally importantly, over this period there has been a much greater focus on the ways in which the Group system delivers benefits for shipowners through its claims pooling arrangements and through the sharing of the unparalleled underwriting, technical and legal knowledge and expertise which resides within the managements of the Group clubs, and ways
of strengthening and improving the system for the future.
In common with other sectors, however, there are disruptive times on the horizon for global shipping, and it is inevitable that there will be fundamental changes to the traditional ship owning and operating models over the coming decades. The challenge for clubs, and for the Group, will be to keep ahead of, and adapt to, these changes, so as to ensure that the system is still fit for purpose, and that it will continue to provide the highest levels and most comprehensive range of cover to meet shipowners’ liability insurance needs. The meetings in Oslo and Newcastle provided an opportunity to look at some of those challenges.
Read the 17 page annual review in full at https://bit.ly/2QbTSb5.