No general increase for Korea Club at February renewal
(Source : 19 December 2012, TradeWinds)
The decision to offer renewal-on-expiry terms means the club will not have had a general increase for three years and this may give it an edge over the Japan Club, which is seeking a 5% rise.
No general increase is to be required by the Korea Shipowners’ Mutual Protection-and-Indemnity (P&I) Association at the February renewal despite the Seoul-based club facing similar pressures to its big international rivals.
The club has revealed that there was a difference of opinion between club managers and the shipowners at a board meeting last week with the owners prevailing.
Club managers felt a 5% general increase was warranted against a background of increasing claims, higher reinsurance costs and the desirability of boosting the free reserve.
But the shipowner directors felt there should be no increase as members are facing financial hardship due to the continuing depressed shipping market.
The decision to offer renewal-on-expiry terms means the Korea Club will not have had a general increase for three years and this may give it an edge over the Japan Club, which is seeking a 5% rise, and other International Group clubs seeking at least 5% and, in some cases, into double figures.
Managers of a number of the International Group clubs would have liked bigger increases than was agreed by their shipowner boards but the Korean club is the only one to make no secret that there was a debate at their board meeting.
The Korea Club, chaired by Youn-Jae Lee, chief executive of Heung-A Shipping, is, however, to revise premiums for individual fleets based on claims records.
Core members include Hanjin Shipping, Hyundai Merchant Marine (HMM), STX Pan Ocean, SK Shipping, Chang Myung, Korea Line Corp, Korea Maritime Transport, Sinokor, Pan Korea Line, Namsung Shipping, Shilla Trading, Taiyoung Shipping and Boyang.
The club, which insures a fleet of about 900 vessels of 12 million gross tons (gt), has recently expanded into Indonesia with an exclusive operating-rights co-operation with the Perkumpulan Proteksi Maritime Indonesia (Promindo) club.
There also appears to be an initiative to establish a new Asian P&I club with the Korea Club, Promindo and Pertamina, the Indonesian state oil-and-gas company, being among the sponsors of a conference due to take place with this objective in Bali in March.
No general increase is also to be required for members of the Standard Club’s small-ship class, which mostly provides cover to operators of European inland waterway and coastal tonnage.
Higher reinsurance will be passed on but any increase will be capped at 5%. All premium for the smaller-ship class will be collected in a single instalment that becomes due at the 20 February renewal.
The Standard Club is seeking a 7.5% increase from owners of bluewater tonnage.