MARINE

P&I COMMERCIAL MARKET REVIEW 2012

www.ajginternational.com

CONTENTS
Welcome from the Executive Director Fixed Premium P&I Insurance Explained Commercial P&I Market Environment Future of the Commercial Market Review of the last 18 Months Non-IG P&I Market Overview Commercial P&I Market Facts & Figures • British Marine • Eagle Ocean Agencies Inc • Hanseatic Underwriters • Hydor • Ingosstrakh Insurance Co • Lodestar Marine Limited • Navigators Insurance Company • Osprey Underwriting Agency Limited • RaetsMarine BV • Rosgosstrakh Ltd Non International Group P&I Mutual Market Facts & Figures • Ceylon Ship Owners Mutual P&I Club • China Shipowners Mutual Assurance Association • Hellenic Mutual P&I & War Risks Association • Korea Shipowners Mutual P&I Association Non-IG Charterers Specialist Facilities Facts & Figures • Charterama BV • Charterers P&I Club • Norwegian Hull Club Industry Statistics Rating Agency Analysis Major Limiting Conventions & Statutes Affecting P&I Risks Contacts 32 33 34 36 38 40 49 26 27 28 29 14 15 16 17 18 19 20 21 22 23 3 4 6 7 8 10

1

2

MARINE P&I COMMERCIAL MARKET REVIEW 2012

MESSAGE FROM THE EXECUTIVE DIRECTOR MALCOLM GODFREY

WELCOME TO OUR FIRST COMMERCIAL P&I MARKET REVIEW

Gallagher London is one of the leading global marine insurance brokers in the P&I industry sector. One of our core beliefs is transferring all pertinent market information to our clients and business partners. The P&I market is broad and varied when it comes to its products, service, security, strength and flexibility. Many brokers tend to focus on reviewing the “main-stream” International Group P&I Clubs and we often see many brokers P&I reviews which more or less offer the same statistics and analysis without real content. We at AJG strive to offer a valuable and accurate opinion on market conditions, which sets us apart from our competitors. The commercial P&I market, also referred to as “the fixed premium market” has been somewhat regarded as secondary in the broker review process. This is one of the reasons why we have decided to compile our first Commercial P&I Market Review, in addition to our Annual P&I Review and Mid-Year P&I Review, which will continue to focus on the International Group Clubs. Our view at Gallagher London is that the non-IG market is an integral part of the maritime insurance industry, offering products and services, where some of the “blue water” P&I Clubs lack enthusiasm to participate in this risk profile. With many P&I Clubs protesting about new building rates, as well as the inherent “churn effect”, with the need to increase rates year on year, should this be a market sector they should consider more seriously? There are a number of P&I facilities, which fall outside of the International Group of P&I Clubs’, that offer covers aimed at specific types of vessel operators. The AJG Commercial P&I Market Review will focus on the leading fixed premium, non-IG Mutual and Charterers Liability facilities, which are generally accessed via London brokers. We have received tremendous support from the commercial market principals, who agree that long established commercial P&I markets are often missed out from publications. Gallagher London P&I remains at the forefront as industry leaders, this is something we are extremely proud of and demonstrates our value added service. Sincerely,

Malcolm Godfrey Executive Director; Gallagher London

3

All of the non-IG facilities are free from the constraints of the International Group Agreement. as insurance packages are specifically tailored to meet the demands of the risk entailed. All of the IG Clubs provide alternative fixed insurance products. Gard. which have been approved by the International Group. environmental pollution. fines and war risks etc. • RELEASE CALLS . something which the IG Clubs voluntarily abide by. SOP and Steamship Mutual also have fixed P&I premium facilities in place for smaller inland craft and U. • COMPETITION .Over the last few years we have seen many P&I Clubs’ insert annual mandatory uplifts/ requirements. The term “fixed premium” means exactly that. on a reduced limit of liability basis.IG Group Clubs have the power to make excess supplementary calls if there is a need to raise funds. The premiums involved in this market sector are often more competitive. operators and charterers for third party liabilities arising from a fortuitous event or a marine peril. which are non-negotiable. which do not fall under the conventional IG Group P&I product or IG reinsurance programme. 4 . such as Charterers’ Liability Insurance and other marine related products. which are often non-negotiable. This is a practice which the commercial market does not follow. however some of the IG P&I Clubs do provide “Owners P&I” fixed premium terms for some longstanding fleets. such as deductible increases etc. as the terms and conditions offered by a commercial insurance company do not expose clients to potential excess calls. such as American. although there may be increases sought on the basis of exposure and operating costs or the overall performance of the insurers portfolio. a ship’s liability after a collision. the ship’s liability to its crew.MARINE P&I COMMERCIAL MARKET REVIEW 2012 FIXED PREMIUM P&I INSURANCE EXPLAINED WHAT IS FIXED PREMIUM P&I INSURANCE? Fixed premium P&I insurance indemnifies ship owners. • SUPPLEMENTARY OR EXCESS CALLS .The commercial insurance companies are able to offer independent terms as well as competing with each other to win business.A client has the freedom to change insurer without having to release themselves from future liabilities to supplementary calls or excess supplementary calls. Renewals are instead underwritten on the assureds’ individual merits and loss record. yachts. which is a tradition practiced amongst most of the IG P&I Clubs. The non-mutual commercial insurance companies do not have this capability. A number of P&I Clubs. Third party risks include a carrier’s liability to a cargo owner for damage to cargo. DO IG P&I CLUBS PROVIDE FIXED PREMIUM INSURANCE? Fixed premium insurance contracts are typically provided by insurance companies or underwriting agents outside of the International Group of P&I Clubs. • ANNUAL MANDATORY REQUIREMENTS . US flagged fleets and Government fleets.S. compared to an IG Group Club option. which is a fundamental part of the IG system. WHAT ARE THE DIFFERENCES BETWEEN COMMERCIAL MARKET AND IG GROUP P&I INSURANCE? • GENERAL INCREASES . unlike IG Group Clubs.The fixed premium market does not adopt the annual general increase philosophy. AJG will focus on these facilities in our “Marine P&I Review 2012” which will be published towards the end of this year.

In an IG Group Club. fixed premium insurers typically need to contact their reinsurers to obtain security guarantees. which would ordinarily be passed onto the assured.IG Group Clubs are focused on “not for profit service”. when handling claims to ensure that the claimant is indemnified at an appropriate level.COM • SECURITY GUARANTEES . Choosing the appropriate level of cover is something that AJG can help you with. in the form of premium returns or not calling budgeted supplementary calls in full to the Membership if the Club has experienced a good underwriting year. • BLUE CARDS .WWW. waters. fixed premium coverage will be limited to a specific limit of liability.S. without additional cost. who decide on policy changes. 5 . which is an important factor to consider. • THE “OMNIBUS RULE” . which could potentially exceed smaller limits.The fixed premium market does not benefit from the IG Club “Omnibus Rule”. • LIMITS OF LIABILITY . • UNDERWRITING FOR PROFIT . the managers are the “servants” of the Club. • CERTIFICATES OF FINANCIAL RESPONSIBILITY (COFR) – A requirement under the US OPA 90 (United States Oil Pollution Act). Most of the fixed premium facilities are not approved by these guarantee companies. the overall control of the Clubs are in the hands of its Members and its ship owner boards.Without access to the International Group Pool. However. It is important to note that the ability of each individual insurance company differs. which can take time and may come with additional costs.AJGINTERNATIONAL.IG P&I Clubs have an integral advantage over the commercial insurance market. It is vital to ensure that Bunker Blue Cards and/or CLC Blue Cards are accepted by the shipping authorities prior to trading. when it comes to issuing letters of security. with the ability to put up an immediate letter of guarantee to secure the release of an arrested vessel. This is where a strong broker like AJG will add value! • SERVICE PHILOSOPHY . Therefore it is important to check this prior to trading to U.Some of the P&I Clubs pass back “dividends”. whereas a commercial insurance company can be more profit focused. there is a requirement that any vessel over 300 GT requires a valid COFR and COFR guarantee cover in place. scope of cover. which require letters of undertaking by an International Group P&I Club.Some fixed premium insurance companies issue blue cards which are not approved by a number of flag states or port authorities. claims payments and premiums calls. however clients may still be exposed to catastrophes. • DIVIDENDS . Guarantee coverage is provided by several COFR guarantee companies. which allows the individual IG Club board’s to decide whether they can indemnify a Member in difficulty.

principally operating in coastal or inland waters. cruise and U. with more new entrants than exits from this market sector. Coverage for over-age and non-IACS classed tonnage is also available from the majority of fixed premium facilities. Non-IG Mutual Insurers and Underwriting Agencies. flagged. trans-Atlantic and trans-Pacific business.S. which AJG is following closely 6 . certain facilities however tend to shy away from passenger. with no liabilities for unbudgeted supplementary calls or annual general increases. limits of liability. 2010) Norwegian Hull Club Osprey Agency Raetsmarine BV *Tindall Riley Small Ship Fixed Facility SPECULATIVE *Royal Sun Alliance P&I MARKET EXIT South of England Mutual (2011) * A rumoured new P&I market facility.MARINE P&I COMMERCIAL MARKET REVIEW 2012 THE COMMERCIAL P&I MARKET ENVIRONMENT There are a number of Commercial Fixed Premium Protection & Indemnity Facilities. short-trade vessels. some are mutual. The fixed premium P&I market has evolved considerably over the last five years. Not all of the alternative facilities offer fixed premium covers. within a tonnage range of up to 25. there have also been a number of investors looking to make new inroads into the fixed premium market.2012) ESTABLISHED MARKET British Marine NEW ENTRANT Ceylon P&I Club (Est.000 gross tons. which is a particularly attractive headline revenue growth area. 2011) Ingosstrakh Hydor (Est. 2012) Navigators P&I Rosgosstrakh P&I (Est. more accessible. which operate outside of the International Group of P&I Clubs. 2010) Hanseatic P&I Hellenic Mutual P&I (Est. 2011) Charterers P&I Club Charterama BV (Est. The following table provides a snap shot for the last five years market development: NON-IG MARKET DEVELOPMENT (LAST FIVE YEARS: 2007 . 2009) China P&I Club Eagle Ocean Marine (Est. operators. These facilities tend to target ship owners with smaller. Some of the key advantages of insuring with a fixed premium insurer are that they can offer certainty of cost and lower. In addition. offering limits up to USD 500 million (higher GT caps and limits are also available depending on the facility). This is perhaps to be expected given the IG Group system’s workings and the competitive nature of the commercial market. In addition to this there are exclusive charterer’s liability specialist insurers. charterers and traders emanating from all geographical areas (subject to EU/US Sanctions). These P&I facilities currently offer insurance solutions aimed at specific types of vessel operators. 2009) Korea P&I Club Lodestar Marine Ltd (Est. All fixed premium facilities target ship owners. which cater to charterers and traders.

As a result of further market entrants. there has been some talk in the market that the Ceylon P&I facility will replicate it. whilst building up their portfolios and claims service reputation. it is also said that German based insurance consortium Hanseatic P&I are in the process of opening a London based representative office in the coming months. the China P&I Club has not been successful. Looking back at the South of England’s exit from the market in 2011. with the commercial market’s competitive nature.WWW.000 GT. up to and exceeding 25. with rates continuing to fall amongst the more established providers. This is mainly due to the abundant supply of fixed premium capacity. are in the process of implementing a small ship fixed P&I facility. which was the first mutual club failure since Ocean Marine Mutual in 2000. With the growing number of international commercial facilities offering P&I insurance. There are various speculative rumours which suggest that RSA (Royal Sun Alliance) are reviewing their options to enter the P&I market.AJGINTERNATIONAL. We have seen fixed premium and charterer’s liability insurers trying to enforce small increases at renewal. these increases usually range between 2. the China P&I Club has been attempting to enter into the International Group league for many years. which is now expanding further due to the number of new entrants into the market. we should see the non-IG market become even more competitive. who will be fighting for position to gain good business. most clients renew on an expiring basis or less. however the Club is primarily focused on areas regional to the Indian Ocean and South China Sea shipping industry. At the moment the facility does offer coverage for all vessel types and size. Turning to the non-IG mutual insurers. we see the fixed premium and non-IG mutual market continuing to grow with further new entrants. in an attempt to increase premiums to cover inflationary operating costs. this is a trend that we see continuing in the short to midterm. The more recent new facilities will continue to operate at the fringe level of the market. 7 . with a loss record ranging from 50% to 100%. we may see the first Chinese entrant into the IG group system in the not too distant future. it is not in the commercial markets nature to do so.5% to 5%. On the IG Group side. by offering terms for non-IACS classed vessels. Furthermore. if technical underwriting deficits result in carriers and reinsurers withdrawing their support. the managers of the Britannia P&I Club. as external pressures and obligations to reinsurers would ultimately hinder this process. With P&I premiums already falling and the average claim value increasing annually. some of the smaller facilities may be forced to exit the market in their infant stage. The Royal Sun Alliance Group is expected to provide the first $100 Million of reinsurance to Lodestar. Looking at the commercial markets’ as a whole. where a hardening reinsurance market may put pressure on insurers to drive prices upwards. as a result of new market entrants • Speculative new P&I markets • Minor concerns regarding the reliability of infant P&I facilities We at Gallagher London see the fixed premium market sector continuing to remain relatively soft for the foreseeable future. However. Consolidation amongst the smaller facilities to command a collective market share could potentially assist to avoid a premature market exit. however with their impressive free-reserve position and ambition to grow outside of China. There is also an underlying current. However. which never got off the ground to any extent. there are some minor concerns that the increasing supply of capacity will not be sustainable or stable in the long term amongst the nonestablished insurers. Typically.COM THE FUTURE OF THE COMMERCIAL MARKET There are a number of dominant factors driving the future of the commercial P&I market. At this stage. it is rumoured that Tindall Riley. which we have identified as follows: • The invariable “Soft” P&I Fixed Premium Market • Increased competition. who have now commenced trading. Tindall Riley had previously launched an H&M/ Fixed P&I product named “Marianne” in the late 1990s.

Osprey Underwriting Agency recruit Richard Lovett. The decision completes the process which began with the Bermuda Monetary Authority petitioning for a winding up order on 7 October and follows the adjournment of the formal proceedings on 18 November. from RaetsMarine BV (London). retired from his position as Chairman at the end of the year. DECEMBER Leading British Marine figure. Robert Johnston. The Club also warned of possible further calls on the 2010/11 year. and their attempts to collateralise the debt failed. SEPTEMBER QBE/ British Marine raise a dispute against Lodestar . reinsured with a number of Lloyds syndicates. JULY Navigators P&I recruit Damian Mustard from Thomas Miller (UK P&I Club) as an Underwriter in the P&I department.MARINE P&I COMMERCIAL MARKET REVIEW 2012 REVIEW OF THE LAST 18 MONTHS 2011 FEBRUARY JUNE The Hellenic Mutual facility commences underwriting P&I risks. QBE accused their former staff of breaching contractual obligations.At the centre of the case were allegations the Lodestar are developing the new project while still working at British Marine. 45% on the 2008-09 policy year and 45% on the 2009-10 policy year. as a P&I Underwriter. NOVEMBER South of England placed in liquidation . It is also understood that questions were raised as to the appropriateness of the Club's corporate structure and governance. The liquidation was ordered on the basis that the Club was insolvent. happiness and success. We wish Robert continued health. The liquidators had 6 months to convene meetings of the members and creditors.The Bermuda Courts have confirmed the appointment of Joint Liquidators at the South of England P&I Club. We suspect that the market will see his return in the not too distant future. Consequently. The Club managers counter argument that early excess calls were collected. RaetsMarine BV (London) recruit David Osborne from the Steamship Mutual as an Owners P&I underwriter. The High Court later advised that Lodestar was not to start operation until April/May 2012. with the BMA believing that much of the $ 31 million excess call ordered in June would prove uncollectible. 8 . Robert was at the helm of British Marine since its demutualisation and played a key role in its development. OCTOBER South of England placed in provisional liquidation at the order of the Bermuda Monetary Authority with a final hearing being scheduled in November 2011. South of England announces excess calls of 20% on the 2007/08 policy year. Eagle Ocean Marine underlying security switched to 100% American Club.

Furthermore Nick Ballantine has re-joined the Board as Chairman.AJGINTERNATIONAL. departs from the Norwegian Hull Club. as Lev Osman steps down. Still no word on the rumoured new small ship fixed premium facility. British Marine recruits Paul Flowers from the North of England P&I Association to join the claims team JULY The South of England P&I Association was due to hold its first creditors meeting in May 2012.COM 2012 JANUARY Andrew Hearn joins British Marine from Tindall Riley. manager of the Britannia P&I Club as Portfolio Manager MARCH Charterama BV reinsurers. but the liquidators applied for. became part of Hanseatic P&I and Hanseatic Defence. 9 . Osprey Underwriting Agency’s Guy Pierpoint is appointed CEO. The first meeting will take place in late September 2012: an initial circular was sent out to interested parties on 6 July. and promptly recalled.to BBB+ APRIL RaetsMarine BV (London) recruit Arneaz Nordin from the Charterers P&I Club as an underwriter for Charterers’ Liability MAY JUNE Charterer’s Liability Underwriter. The statutory solvency statement attached to the circular pointed to an audited statutory deficit in excess of $ 31. and were granted. REAAL Schadeverzekeringen NV. a 3 month extension to this deadline. Powan Li. German based insurance consortium Hanseatic P&I’s participating insurance companies raised to six as UNIQA Sachversicherung AG. Vienna.3 million at 31 December 2009. downgraded by S&P from A.WWW. Tindall Riley recruits Mark Esdale from Charles Taylor Consulting (Standard P&I Club) and Julie Page from Thomas Miller (UK P&I Club).

000 GT OSPREY US$ 34.100.000 27.000 TONNAGE/VESSEL # 12.000 GT ROSGOSSTRAKH LTD Rosgosstrakh Ltd Local Rating: Expert Ra A++ US$ 3.200.000.000 - INGOSSTRAKH US$16.000.000 Approx.005.600.000 2. 3.000 GT HYDOR US$ 2. 250 + Clients CHINA P&I CLUB US$ 53.000 13.029 vessels on risk NORWEGIAN HULL CLUB KOREA P&I CLUB Norwegian Hull Club S&P: A Mutual Insurance Company S&P: Unrated Lloyds Brit Syndicate 2987 S&P: A+ RSA and Various Lloyds Syndicates S&P: A Navigators Insurance Company S&P: A Lloyds of London S&P: A+ US$ 11.000 10.500.MARINE P&I COMMERCIAL MARKET REVIEW 2012 NON-IG P&I MARKET OVERVIEW FACILITY CARRIER ANNUAL PREMIUM/ 2011 INCOME US$ 125.800.000.178.007.250.000.400.000.000 GT BRITISH MARINE QBE Insurance (Europe) Ltd S&P: A+ CEYLON P&I CLUB Mutual Insurance Company S&P: Unrated US$ 5.800.000 Approx. 150 charterers clients US$ 30.000.444 GT CHARTERERS P&I CLUB Great Lakes/ Munich Re S&P: AA US$ 27.000 - LODESTAR MARINE LTD - - NAVIGATORS P&I US$ 22.000 GT EAGLE OCEAN MARINE US$ 5.000 Approx.200.000.000 1.000 454.050.000.000 1.211 GT HANSEATIC P&I US$ 15.000 vessels RAETSMARINE BV Amlin Corporate Insurance BV S&P: A P&I: US$ 33.800. 230 + Clients CHARTERAMA BV REAAL Schadeverzekeringen NV S&P: BBB+ Mutual Insurance Company S&P: Unrated American P&I Club/ Lloyds of London S&P: BB+ Insurance Consortium – See Page 16 S&P: Various ”A” rated Mutual Insurance Company S&P: Unrated Ingosstrakh S&P: BBB US$ 10.000.000 1.250.000 Approx.000 CL: US$ 62.000 GT 10 .000 2.500.000 GT HELLENIC P&I MUTUAL US$ 1.

SRI LANKA Up to USD 500 Million No limit LONDON. UNITED KINGDOM Up to US$ 500 Million Up to 10.000 GT - OSLO. FD&D limited to US$2 Million.000 GT Does not write passenger. U.000 GT - LONDON.500 GT Coverage is not available to operators based in the USA HAMBURG. Writes all classes of business. USD 1 Billion in some cases Up to 10.000 GT Up to 10.COM LOCATION LIMIT MAX SIZE VESSEL EXCLUSIONS ETC LONDON. NETHERLANDS P&I: Up to US$ 500 Million CL: Up to US$ 500 Million FD&D: Up to US$ 2 Million Up to US$ 100 Million Up to 25. UNITED KINGDOM Up to US$ 500 Million.000 GT ROTTERDAM. UNITED KINGDOM LONDON. UNITED KINGDOM Up to US$ 500 Million Up to 10. FD&D limited to US$ 2 Million COLOMBO. - Up to US$ 100 Million Up to 25. UNITED KINGDOM Up to US$ 350 Million No Limit ROTTERDAM.S. CHINA IG-Club Limits No Limit - NEW YORK.000 GT 11 . GREECE Up to US$ 500 Million Up to 25.000 GT Avoids passenger risks. Does not write Turkish Business.WWW.000 GT No Limit on Charterers Liability Up to 25.000 GT Max 10. reefers and vessels trading trans-Atlantic or trans-Pacific.000 GT MOSCOW. NORWAY Up to US$ 200 Million - SEOUL.000 GT for tankers - ATHENS. private/pleasure yachts and US Flagged business.A P&I: Up to US$ 25 Million FD&D: Up to US$ 2 Million Up to 12. including Non-IACS tonnage Excludes TransPacific/Atlantic Accepts Charterers Liability Risks Only. NORWAY Up to US$ 500 Million - LONDON. cruise vessel or US based operators. Does not write Tanker (persistent cargo) business.000 GT - MOSCOW. BERGEN. KOREA Up to US$ 300 Million Tankers: < 10. US Flagged business limited to US$ 1 Million.000 GT Non-Tanker: < 100.000 GT No Limit Does not write large tankers. NETHERLANDS Up to 100 Million No Limit BEIJING. RUSSIA Tankers up to 8.000 GT Charterers up to 30. Does not write passenger business.AJGINTERNATIONAL. RUSSIA P&I: Up to US$ 500 Million FD&D: US$ 1 Million No Limit 90% of vessels are < 10. Accepts Charterers Liability Risks Only. GERMANY Up to US$ 500 Million Up to 40. dirty tankers.

12 .

COMMERCIAL P&I MARKET FACTS AND FIGURES 13 .

com Established in 1876. There is however a guideline tonnage cap of 30.000 GT.000. With effect from 31st March 2010. British Marine is a specialist Hull & Machinery.britishmarine.000 GT) London.200. At the turn of the 21st Century British Marine was de-mutualised and more recently in 2005 the privately held fixed premium insurer was successfully acquired by the QBE Group. On the Charterer’s Liability side.000 2009 2008 2007 - OTHER INFORMATION /PRODUCTS/NEWS • British Marine underwrites in excess of 10.MARINE P&I COMMERCIAL MARKET REVIEW 2012 BRITISH MARINE www. The “British Marine” brand name has now become a trading name for QBE. United Kingdom GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 40% Western Europe 17% Far East 10% Eastern Europe 9% Middle East 9% Americas 5% India 4% Scandinavia 3% Africa 3% Australasia 28% General Cargo 20% Tugs & Barges 17% Bulkers 10% Containers 9% Others 7% Fishing 5% Tankers 3% Yachts 1% Dredgers POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage 12. as well as H&M and Charterer’s Liability Insurance products.000 2010 13.600. all of British Marine’s assets and liabilities. including its current and past contracts of insurance and reinsurance were transferred to QBE Insurance (Europe) Limited. 14 . limits for P&I are available up to USD 100 million with Charterer’s Damage to Hull being limited up to USD 50 million. offering P&I limits up to USD 500 million (limits up to USD 1 Billion are also available).000 2009 2008 2007 $125.000 GT. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: QBE and Lloyds of London A+ Up to US$ 500 Million Up to 10. Today British Marine provides fixed cost P&I insurance solutions.000 2010 $ 133. with 90% of their portfolio consisting of medium size merchant vessels and the balance of the portfolio being made up of fishing vessels and super yachts. The insurer typically writes vessels up to 10. which is backed by S&P 'A+' rated security.500.000 vessels.000 GT (Charterer’s Liability up to 30. Protection and Indemnity and Legal Expenses insurer for small to medium sized vessels.

which is a general marine adjusting and claims handling company.COM EAGLE OCEAN AGENCIES INC www. namely Eagle Ocean Marine. The agency has recently re-structured its insurance and reinsurance arrangements..000 2009 N/A N/A N/A 2008 N/A N/A N/A 2007 N/A N/A N/A OTHER INFORMATION /PRODUCTS/NEWS • Through the American P&I Club network. offering Protection and Indemnity and Freight.A.000. as well as providing American Club blue cards. providing the primary security. and Atlantic Marine Associates. The facility is primarily focused on operators of smaller ships.000 $ 1. In 2010. however coverage is not available to operators based in the U. waters. Piraeus and Shanghai. Demurrage and Defence insurance solutions..500.000 2009 N/A 2008 N/A 200 N/A $ 5. USA GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 60% Asia Pacific 25% Other 10% Europe 5% Americas 35% Tankers 25% Tug & Barge 20% General Cargo 15% Others 5% Bulkers POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage 454. London. Inc. 15 . who are the managers of the American P&I Club. the Directors of the American P&I Club formed a separate fixed premium facility. Inc. is an affiliated company of The Shipowners Claims Bureau. Inc.211 2010 50. At present the facility is more Far East focused.000 2010 $ 500.500 gross tons. below 12. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: American P&I Club (Quota Share Reinsurance in London and German Markets) BB+ Up to US$ 25 Million Up to 12. This in turn will allow Eagle Ocean to put up American Club security guarantees up to its primary limits.AJGINTERNATIONAL. New York. operating in regional waters. Inc.S.500 GT New York. c ombined with a full network of claims agents Worldwide. with 60% of their portfolio emanating from this region. Eagle Ocean Marine has associated offices in New York.eagleoceanmarine.000 $ 3. with policy limits being available up to $25 million for P&I and $2 million for FD&D. with American Steamship Owners Mutual Protection and Indemnity Association. or trading exclusively in U. P&I coverage is available to operators on a worldwide basis.WWW.com Eagle Ocean Agencies.000 $0 $ 500.S.500.

000 2007 $ 5.050.000 2010 2009 2008 2007 $ 15. Ergo and Sovag. Russia and Turkey and it is presently looking to expand to select Middle East /North Africa and Asian regions. More recently in July 2012 the numbers of participating insurance companies increased to six as UNIQA Sachversicherung AG. Additionally Hanseatic has expertise in traditional. charterer’s liability and inland craft P&I cover. Gothaer. The core risk appetite of Hanseatic P&I is small and medium size general cargo and container vessels.MARINE P&I COMMERCIAL MARKET REVIEW 2012 HANSEATIC P&I HANSEATIC UNDERWRITERS www. Hanseatic P&I core business emanates from all parts of Europe.000 2008 $ 7.hanseatic-pandi.000 $ 7.000 2010 $ 14.000 2009 $ 11.000 $ 1.000 $ 1.000.000 $ 7.000 $ 4. The facility offers P&I cover for all types of vessels with a limit up to USD 500 Million.com Hanseatic P&I is an insurance consortium.800. Germany GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 85% Europe 10% Other 5% Asia Pacific 42% General Cargo 33% Container 14% Other Cargo 6% Bulkers 3% Miscellaneous 1% Passenger 1% Tankers POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage 2. Hanseatic P&I provide ship owner’s liability. which was founded in 2005.000 $14.200. Gothaer Allgemeine Versicherung AG (S&P: A-).000 GT for tankers) Hamburg.000 OTHER INFORMATION /PRODUCTS/NEWS • Hanseatic’s insurance consortium is made up of: Allianz Global Corporate & Specialty AG (S&P: AA). At present.900. Torus Insurance (Europe) AG (AMB: A-) and UNIQA Sachversicherung AG (S&P: A-). Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Allianz Global Corporate & Specialty AG – Swiss Re – Lloyds of London A Up to US$ 500 Million Up to 40. The consortium is managed by Zeller Associates Management Services GmbH. Hamburg.000 $ 1. 16 .100.200.900. offshore and specialist vessels of any type.900. by five German Insurance Companies: Allianz.000 $ 12. Kravag-Logistics Versicherungs-AG (S&P: A+).700. The underwriting philosophy at Hanseatic was originally focused on German and Northern European interests and later diversified its underwriting criteria to include other geographical areas. based on the same consortium of insurance companies as its P&I product.000 -$ 200.000 $ 3. Kravag. as well as liquid cargo and dry bulk. Ergo Versicherung AG.000 GT (max 10. March 2011 saw Sovag leave and Torus Insurance (Europe) AG join. also became part of Hanseatic P&I and Hanseatic Defence.700.900. In addition FD&D is provided as either an additional or separate legal expenses cover under the brand name “Hanseatic Defence”.700.800.800. Vienna.

AJGINTERNATIONAL. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Lloyd’s of London [Brit Syndicate 2987] A+ Up to US$ 500 Million Up to 10. Dubai.000 GT. former P&I Club Senior Managers. which is a legal and claims consultancy staffed by lawyers from the major UK shipping law firms. Norway GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 33% Norway 13% Germany 9% Greece 6% Denmark 6% America 6% Middle East 6% Russia 5% Turkey 4% Greenland 3% France 3% Africa 2% Far East 2% Singapore 2% Cyprus 27% General Cargo 15% Offshore 12% Tanker 11% Other 8% Ferry 7% Bulker 7% RORO 6% Fishing 4% Tug 2% Container 1% Reefer POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage Not Disclosed 2010 2009 2008 2007 $ 2.COM HYDOR www.000 2010 2009 N/A N/A N/A 2008 N/A N/A N/A 2007 N/A N/A N/A OTHER INFORMATION /PRODUCTS/NEWS • Hydor also provides insurance products for Hull & Machinery. Charterer's P&I. The fixed premium facility looks at vessels up to 10. C Solutions have been authorised by Hydor to handle all claims exclusively. 17 . Hydor is an underwriting agent on behalf of the Brit Syndicate 2987 (Lloyd’s of London) offering fixed premium Owner's Protection & Indemnity.no Established in 2010. Greece. • All claims are handled from C Solutions London headquarters (Lloyd's Building) and from dedicated branch offices in Newcastle . providing limits up to USD 500 million for P&I and Charterer’s Liabilities.900. Whilst Hydor is an underwriting agent for the Brit Syndicate. Hong Kong. Shanghai. Through Lloyd’s of London the Brit Syndicate 2987 holds security ratings from Standard & Poor's A+ (Strong).hydor.000 $ 100. Hydor is licensed and regulated by the Financial Supervisory Authority (FSA) of Norway. Energy (mainly for Norwegian focused operators) as well as offer ing Cargo insurance on a standalone basis and for traders in combination with charterers P&I. FD&D and other marine related insurance products. Monaco. Australia and through a commercial and legal network of correspondents around the world.WWW. • Hydor’s 2012 Premium Income is estimated around US$ 5 Million.000 $ 1. India. the claims service is provided by C Solutions Limited.000 GT Oslo. Master Mariners and Engineers.000.

227.542.207. cruise vessels or U.Increase Value .000 -$ 1.000 2010 $ 16.127.(Local National Rating ruAA+) US$ 500 Million (US$ 1 Million for FD&D) No limit.500 -$1.000 $ 12.by Standard & Poor’s and a National Scale rating of ruAA++. The facility offers P&I. CIS and East European Countries. is a private federal level Insurance Company. Russia.250.000 GT Moscow. based business.225. however it holds a leading share of the Russian P&I Market giving particular preference to ship owners from Russia. to larger ocean going vessels in excess of 20.S. FD&D.500 2008 $ 16. which was founded in 1947.592.000 OTHER INFORMATION /PRODUCTS/NEWS • Hull & Machinery .Loss of Hire / Freight • War – Builders Risks – Cargo – Carriers and Liability Rolling Stock 18 .000 units. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Not Disclosed BBB.062.MARINE P&I COMMERCIAL MARKET REVIEW 2012 INGOSSTRAKH INSURANCE CO www.000 $ 17. based in Moscow. however 90% of the portfolio is <10.750. handling a large range of vessels from smaller inland and costal craft. The insurer has an international portfolio.500 2007 $ 16.100.842. Ingosstrakh covers in excess of 1.500 -$ 812. The facility has performed consistently well over the last twelve years with an aggregate loss ratio of 85.000 $ 17. Cargo and other marine related insurance solutions.500 2009 $ 16.750 000 $ 8.ru Ingosstrakh Insurance Co.250. Russia GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL Not Disclosed 37% Dry Cargo 17% Other 16% Tug & Barge 11% Fishing 9% Tanker 4% Bulkers 2% Container 2% Passenger 2% RORO POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage Not Disclosed 2010 2009 2008 2007 $ 16. H&M.025.ingos.3% The company is rated BBB.000 $ 4.500 $ 8. The facility does not cater to large tankers.000 GT.000 $ 18. The facility offers limits up to USD 500 Million for P&I and US$ 1 Million for FD&D.

with limits up to USD 500 Million in co-operation with RSA and other "A" rated insurers who will provide security.WWW. Lodestar is in the process of finalising Flag State approval for the issuance of Blue Cards with acceptance already received from a number of Authorities including United Kingdom. salvors liability. a family owned investment company with consolidated assets in excess of Euro 27 Billion. supported by further administration staff based in Gloucester. Lodestar comprises of a team of experienced underwriters and claims executives plus in-house surveyors. 19 . part of Groupe Artémis.AJGINTERNATIONAL. Typical vessels insured by Lodestar will not exceed 10. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Lloyds of London [RSA and other A rated reinsurers] A Up to US$ 500 Million Up to 10. specialist operations.000 GT London. The facility will write Fixed Premium P&I risks. United Kingdom GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL N/A N/A POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage N/A 2010 N/A 2009 N/A 2008 N/A 2007 N/A N/A N/A N/A 2010 N/A N/A N/A 2009 N/A N/A N/A 2008 N/A N/A N/A 2007 N/A N/A N/A OTHER INFORMATION /PRODUCTS/NEWS • Lodestar insurance products include. war risks (P&I). A global network of over 250 Correspondents has been established. extended towers liability and FD&D. Hong Kong and Australia etc. charterers liabilities.000 Gross Tons. In the event of a claim. backed by Tawa Plc. security can be provided by either a letter of undertaking or bank guarantee. Netherlands.lodestar-marine. Furthermore. ship owners liability (SOL). contractual liability. Lodestar is authorised and regulated by the FSA as an appointed representative of Pro Insurance Solutions Limited. under contract with Pro Insurance Solutions Limited.COM LODESTAR MARINE LIMITED www. Lodestar is a partnership.com Lodestar Marine Limited (Lodestar) was established in 2012 and will provide fixed premium P&I insurance solutions.

the Navigators Insurance Group set up a fixed premium P&I facility protecting ship owners. cruise. short-sea and limited Ocean trades. Flagged business. waters.S. Navigators Insurance Company and Navigators Specialty Insurance Company are both rated ‘A’ (Strong) by Standard & Poor’s. based in London.2000.000 GT.500. Flag. In addition to Owner’s P&I.S.000 GT London.MARINE P&I COMMERCIAL MARKET REVIEW 2012 NAVIGATORS INSURANCE COMPANY www.000 GT. excluding U. cover is also available on a worldwide trading basis. offers fixed-cost Protection & Indemnity cover to vessels in coastal. private/ pleasure yachts or U.000 gross tons.000 2010 2009 2008 2007 $ 22. excluding passenger vessels and those with U. United Kingdom GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 37% UK/Europe 24% Asia 13% South America 10% Mexico and Central America 9% Middle East 5% Africa 2% Other 58% Containers/General Cargo 13% Tug & Barge 12% Other 8% Dry Bulk 7% Tankers 2% Offshore POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage 2.com Established in 2004. 20 . Charterer’s Liability is also available to vessels below 10. The facility offers limits up to USD 500 million and looks to insure vessels up to 10.S. Navigators can also offer contractual liabilities as an extension of the main P&I coverage. Navigators underwriting profile looks at all types of vessels.navpandi. Today Navigators P&I. managers and charterers against liabilities arising out of operating their vessels. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Navigators Insurance Company A Up to US$ 500 Million Up to 10.000 2010 2009 2008 2007 - OTHER INFORMATION /PRODUCTS/NEWS • Navigators looks at all types of operators and tonnages up to 10. however the facility does not cater to passenger.

000 GT (Dry Bulk) and 10. Osprey Underwriting Agency is a specialist P&I fixed premium insurance provider. Primary P&I Insurance. The Agency provides insurance services to ship owners on a variety of vessel types and operations.WWW.S.000. with a focused portfolio of tugs. The facility caters for vessels of up to 25. whilst maintaining its leading position as providers of U.000 2007 $21.e.000 Not Disclosed Not Disclosed 2010 $34.000 GT all other vessel types London.000 2008 $27. Osprey is the longest established fixed premium insurer in London.000.uk Established in 1991. United Kingdom GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 66% USA 14% Europe 7% Caribbean 5% Asia 4% South America 2% Other 1% Middle East 1% Africa 49% Tugs & Barges 25% Fishing 14% Oil Field Services 6% Other 3% Passenger 3% Dry Cargo POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage Not Disclosed 2010 2009 2008 2007 $34. Coverage can be provided on a worldwide basis.000 GT for all other vessel types.000 OTHER INFORMATION /PRODUCTS/NEWS • USA Flagged business is limited to USD 1 Million • H&M can be offered in combination of P&I upon request.000 GT.000.AJGINTERNATIONAL.co. which is backed up by an extensive global network of correspondents and Lloyd’s agents.COM OSPREY UNDERWRITING AGENCY LIMITED www. up to a value of USD 12. engaged in the carriage of dry cargoes and up to 10. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Lloyds of London [Various Syndicates] A+ Up to US$ 100 Million Up to 25.special-risks. Osprey cannot provide insurance for tankers carrying persistent oil cargoes.000.5 Million including IV • Specialist Marine Employer’s Liability and Marine General Liability coverage is also available • Osprey does not write tankers carrying persistent cargoes (i.000 2009 $31. dirty products) 21 . Celebrating their 21st year this year. Osprey is actively looking to expand its non-US book of business with a focus on Asia.000. barges and fishing vessels.

London and Singapore. fishing boats. initially writing charterers liability insurance only. United Kingdom) GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 55% Europe 28% Asia-Pacific 8% Middle East/India 5% Central South America 2% Africa 1% North America 1% Russia & CIS 19% General Cargo 17% Specialist Craft 16% Tug 15% Fishing 15% Barge 7% Tankers 5% Other 4% Passenger 2% Bulk Carrier POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage 13. The facility currently serves over 1. Marine Specialist Covers. Bunker Insurance. • The RaetsMarine Charterer products also offers. Marine Cargo Insurance.rated by Standard and Poor’s. operators. up to 25. size. FD&D.500. For Charterers Liability. • Additional Covers also include.000 2010 2009 2008 2007 $ 95.com RaetsMarine BV was founded in 1993. Marine Hull Insurance. Freight Insurance. where they provide P&I.000 GT Rotterdam. Marine Defence Insurance (FD&D).000 GT. RaetsMarine BV are underwriting agents of Amlin Corporate Insurance BV. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Amlin Corporate Insurance BV AUp to US$ 500 Million Up to 25. age or territory. tugs and barges and other specialist units. RaetsMarine BV is backed by Amlin Corporate Insurance BV which is A.000.000 charterers. including traders. Shipowners’ Liability (SOL) Insurance and War Risk Insurance. Charterers’ Piracy.MARINE P&I COMMERCIAL MARKET REVIEW 2012 RAETSMARINE BV www. Netherlands (with underwriting authority in London. RaetsMarine has no restrictions on vessel type. Multimodal Insurance (Ports and Logistics). Trade Disruption Insurance.000 Not Disclosed Not Disclosed 2010 2009 2008 2007 - OTHER INFORMATION /PRODUCTS/NEWS • RaetsMarine BV has branch offices in Paris. Today. Charterers Liability and other marine related products. NVOCC's and others chartering vessels. Blue Card – Bunker Convention Liability Cover 22 . The “Owners P&I” facility targets small to medium sized vessels. offering limits up to US$ 500 Million (for both owned and chartered business).raetsmarine. Detention Insurance. as well as supply vessels. Kidnap and Ransom Insurance.

stevedores etc.005. As a Marine Insurer. Malta.000 offices throughout Russia. The insurer currently handles in excess of 580 vessels. Japan and UMA of Turkey as well as the maritime authorities and flag states such as Russia. ports.480 2007 - OTHER INFORMATION /PRODUCTS/NEWS • Other products include: • Hull & Machinery insurance • Yacht insurance • Cargo insurance. which provides H&M and P&I insurance solutions.415 $ 3. Liberia.500 GT Moscow.055 Not Disclosed Not Disclosed 2010 $ 3.019 2010 1.258 2007 78. RGS is accredited by MLIT. offering limits up to 100 Million.500 GT for tankers).038.rgs.Expert Ra A++) US$ 100Million Up to 25. Russia GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 100% Europe 30% Tanker 28% Other 20% Tug 11% General Cargo 4% Passenger 3% Barge 2% Fishing 1% Bulker 1% Reefer 1% RO-RO 1% Supply POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage 1.AJGINTERNATIONAL.885.170 2008 232.000 GT (and 8. Rosgosstrakh Ltd is one of the leading Insurance companies in Russia.019 (based on 2011 policy year).532 2008 $ 744.) 23 .000 professionals in 83 regional branches comprising of 3.286. as well as other liabilities (including terminals.000 Retention (with a reinsurance treaty with various A rated carriers) Unrated (Local Rating . The insurer is also expected to become a member of BIMCO by the end of 2012. In 2010 the insurance company was privatized and today it employs over 100.000 GT with tankers up to 8.500 2009 562. Rosgosstrakh is the third largest carrier in Russia. with a combined GT of 1.943.ru Established in 1921.643 2009 $ 1.COM ROSGOSSTRAKH LTD www.005. catering to vessels up to 25. RGS is locally rated by Expert Ra and currently holds a rating of A++ Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: USD 500.WWW. Panama and others.

24 .

NON-INTERNATIONAL GROUP P&I MUTUAL MARKET FACTS AND FIGURES 25 .

037. Currently the focus of the Clubs expertise is regional to the Indian Ocean and South China Sea shipping industry.ceylonpaiclub. The Club offers limits of liability up to USD 500 Million and can cater to all vessel GT types and tonnages/ including Non-IACS classed vessels.178. However the club will expand by offering its product to all geographical regions in the future. as a company limited by guarantee. The Club management and operational undertakings are conducted by the Ceylon P&I Club Management Ltd.112 N/A 2010 N/A N/A N/A 2009 N/A N/A N/A 2008 N/A N/A N/A 2007 N/A N/A N/A OTHER INFORMATION /PRODUCTS/NEWS 26 .MARINE P&I COMMERCIAL MARKET REVIEW 2012 CEYLON SHIP OWNERS MUTUAL P&I CLUB www.554 $1. Sri Lanka GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 74% Middle East 18% India 8% Far East 78% Tanker 10% General cargo 8% Bulker 4% Other Vessels POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage 1. The Club only offers its members Mutual Protection and Indemnity insurance. the Ceylon Ship Owners Mutual P&I Club was created by members of the Asian ship owning community. which is incorporated in Sri Lanka. The P&I Club are supported by Asian and Lloyds of London reinsurers. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Kuwait Re – Lloyds of London Unrated Up to US$ 500 Million No Limit Colombo.444 2010 N/A 2009 N/A 2008 N/A 2007 N/A $5. head quartered in Colombo.412.com/en Established in 2011.

however the Club does rely on reinsurance arrangements to offer its Members IG-Club limits.000 $ 14.000 OTHER INFORMATION /PRODUCTS/NEWS • The CPI’s estimated supplementary call rate is 20%. the CPI set up a service office in Hong Kong.800.500. China GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 100% Asia Not Disclosed POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit Note: Most recent two policy years do not include 20% supplementary Call 2010 $ 46.000 ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage 27. SSM. while the estimated release call rate is 35%. China. UK Club and the West of England. The CPI is not a member of the International Group of P&I Club’s. Charterers Liability and Hull insurance solutions to its Members. UK and WofE) Unrated International Group P&I Club Limits N/A Beijing.cpiweb.000 $ 53.000 2008 $ 37.500. • The Club has not required an unbudgeted supplementary call since 2003.900.300.000 $ 16.000.000 2010 24. The Club has an exceptionally strong free reserve amounting to US$ 686 Million.200. 27 .600.org The China Shipowners Mutual Assurance Association was established in 1984. The Club has a growing portfolio of predominately Chinese Members and has more recently attracted new Members from Hong Kong.000 2009 17. Singapore and other parts of Asia. with additional representative offices in the major ports of China's mainland.AJGINTERNATIONAL.WWW.000 $ 17.000 2008 16.COM CHINA SHIPOWNERS MUTUAL ASSURANCE ASSOCIATION www.300.000 2007 $ 34.000 2007 14. such as Shanghai and Dalian.000 $ 18. Steamship Mutual. through a co-insurance arrangement with the Skuld.300. Legal Defence.400.300. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Co-Insured with International Group P&I Club (Skuld. which would put CPI second to Gard in terms of free reserve strength (compared to IG-Group Club free reserves). In 1994.000 $ 16.400.000.000 2009 $ 46. based in Beijing.500. offering mutual P&I.

000 GT Athens. however commenced trading in 2011. The facility offers limits of liability up to US$ 500 Million (coverage up to US$ 1 Billion is also available). The Hellenic P&I Mutual are managed by Agion Insurance Company SA. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Lloyd’s of London (Various Syndicates Unrated Up to US$ 500 Million Up to 20. Loss of Hire.mutual.MARINE P&I COMMERCIAL MARKET REVIEW 2012 HELLENIC MUTUAL P&I & WAR RISKS ASSOCIATION www. War Risks on Hull & Machinery. FD&D and War Risks Insurance predominantly to the Greek shipping community. who are based in Greece and are in the process of setting up a London based representative office. providing P&I. War P&I.406 $ 500.406 2010 $ 332. Greece GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 80% Europe 20% Middle East 40% RORO 30% Bulkers 30% Tankers POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage N/A 2010 N/A 2009 N/A 2008 N/A 2007 N/A $ 1. K&R LOH and Oil Pollution. Crew Liabilities.592 2009 N/A N/A N/A 2008 N/A N/A N/A 2007 N/A N/A N/A OTHER INFORMATION /PRODUCTS/NEWS • H&M (Hull value up to USD100 million any one vessel).000 $ 755. which are owned and operated by Greece ship owners and operators.255. The insurer will initially focus on writing passenger and dry cargo vessels up to 25. 28 .000 GT.gr The Hellenic P&I Mutual was established in 2007. Kidnap and Ransom.

000 2007 3.000 2008 4.702.000 GT for dry cargo vessels and up to 10.000 2010 8.965.484.000 $ 16. as well as other marine related insurances.561.808. Additional Products Include: • Charterer’s Liability. The majority of their portfolio consists of Korean Members.993. covering in excess of 900 vessels.996. which makes up 97% of the Club.000 $ 3.000 $ 11. India.288.090.106.000 $ 13. 29 .000 2010 $ 25.000 $ 11. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Lloyd’s of London.000 $ 7.000 $ 8. Shipowners Liability and Slot Charterer’s Liability.066.685.000 2007 $ 8.873.700.000 $ 3.COM KOREA SHIPOWNERS MUTUAL P&I ASSOCIATION www.000 GT for tanker tonnages. Korean Re and ACR. Damage to Hull.055.000 GT) Seoul. offering fixed premium P&I solutions.000 2008 $ 11.WWW. The facility offers P&I limits of liability up to US$ 300 Million (US$ 1 Billion is also available in some cases). Singapore. with a premium income of approximately US$ 30 million (based on 2011 results). FD&D.S.000 $ 30.295.kr The Korea Shipowners Mutual P&I Association was established in 2000. KPI operates as a mutual organisation (not for profit).or.AJGINTERNATIONAL.000 2009 7.000 $ 4.kpiclub.000 OTHER INFORMATION /PRODUCTS/NEWS • 900+ Ships Entered • KPI’s Blue Cards are accepted by Japan.007.193. KPI targets a large tonnage range of merchant vessels ranging up to 100.184. Korean Re and ACR Unrated Up to US$ 300 Million Up to 100.338. commanding a collective market share of 10 Million GT.A.000 GT (tankers up to 10. UK and U. backed by reinsurers from Lloyd’s of London. Korea GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 97% Korea 3% Asia-Pacific 59% Bulk/General Cargo 10% Container 9% Other 7% Car Carrier 5% Tanker 4% Passenger 3% Fishing 3% Tug & Barge POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage 10.000 2009 $ 19.000 $ 13.

30 .

NON-IG CHARTERERS SPECIALIST FACILITIES FACTS AND FIGURES 31 .

charterama.. BBB+ Up to US$ 100 Million (Charterers Liability) N/A Rotterdam.000. The facility specialises in Charterers’ Liability.000 2008 N/A 2007 N/A 32 . based in Rotterdam.V. additional “fringe” products.000. Netherlands. Damage to Hull and FD&D coverage. with their extensive global network of correspondents. Netherlands GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 65% Europe 15% Asia Pacific 11% Americas 9% Other 45% Bulkers 29% General Cargo 13% Tankers 6% Reefers 5% Containers 2% Others POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage OTHER INFORMATION /NEWS Additional Fringe Covers Available: • War cover • Bunker cover • Freight cover • Detention cover • Piracy Loss of Hire Not Disclosed 2010 2009 2008 2007 $10. as an underwriting agency offering a full range of Charterers’ P&I coverage.000 2009 $3. the facility is able to respond worldwide. the facility has grown tremendously from a premium income of US$ 3 Million in 2009. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: REAAL SchadeVerzekeringen N.MARINE P&I COMMERCIAL MARKET REVIEW 2012 CHARTERAMA BV www. such as War and Bunkers insurance are also available. Given the facilities modest size of five staff members.000 Not Disclosed Not Disclosed 2010 $7.nl Charterama BV was established in March 2009. Charterama BV is backed by its primary carrier REAAL Schadeverzekeringen N. REAAL Schadeverzekeringen holds a BBB+ Standard and Poor’s rating. along with reinsurance through Munich Re. offering limits up to US$ 100 Million and US$ 2 Million for FD&D.000.V. Chartis and Lloyds of London. to US$ 10 Million in 2011.

500.AJGINTERNATIONAL.000 2008 $ 27. offering fixed premium charterers liability and other marine related products.300. though its global correspondent network.rating. are the managers of the Club and provide all underwriting and claims support.. United Kingdom GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 38% Europe 35% Asia 10% Middle East/India 9% Australasia 5% Africa 3% Americas 75% Bulkers 17% Liner 5% Tankers 3% Other POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage Not Disclosed 2010 2009 2008 2007 $ 27. Michael Else & Co. specialising in charterers liability insurance and defence coverage. The facility provides limits of liability up to USD 500 million for charterer’s liability and up to USD 2 million for FD&D.100.Munich Re Group AAUp to US$ 500 Million (Charterers Liability) N/A London. as a mutual insurance company. a specialised insurer for Freight forwarders.exclusivelyforcharterers. In 1999 the Club was demutualised and an underwriting agency was formed.WWW. NVOCC and similar business’s 33 . which holds an S&P AA.000 OTHER INFORMATION /PRODUCTS/NEWS • The Charterers P&I Club do not write cruise or passenger business Other Business Lines are as follows: • Transmarine. is a Loss of Hire insurer for commercial vessels and also the cruise and passenger industry.400.000 Not Disclosed Not Disclosed 2010 $ 27.200. backed by Lloyds of London security.com The Charterers P&I club was founded in 1986.000 2009 $ 26.000 2007 $ 24. In 2009 the agency switched its security to Great Lakes Munich Re Group.COM CHARTERERS P&I CLUB www. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Great Lakes . • Portside.

with approximately 150 charterers & traders clients. FD&D for charterers is also available in addition to the Clubs extensive marine insurance product range. The Clubs’ charterer’s facility offers limits up to US$ 500 Million for traditional Charterer’s P&I and Damage to Hull. Marine Benefits Insurance and Construction All Risk Covers. Yachts.MARINE P&I COMMERCIAL MARKET REVIEW 2012 NORWEGIAN HULL CLUB www. today their portfolio commands a premium income of around US$ 11 Million. 34 .no In 2008 the Club commenced underwriting Charterer’s Liability risks.norclub.100. Reinsurance Carrier: S&P Information: Limits offered: Vessel Cap: Location: Not Disclosed AUp to US$ 200 Million (Charterers Liability) N/A Bergen. *Information provided by Elysian Insurance Services (2011 premium based on Charterers Liability Income only). The Norwegian Hull Club has a large share of the Norwegian ocean hull market and ranks amongst the largest pure marine underwriters in the world.000* Not Disclosed Not Disclosed 2010 2009 2008 2007 - OTHER INFORMATION /NEWS • The NHC can provide insurance solutions for Offshore Energy & Special Risks. Norway GEOGRAPHIC SPREAD OF BUSINESS TYPE OF ENTERED VESSEL 48% Asia Pacific 41% Europe 11% Other Not Disclosed POLICY YEAR INFORMATION IN US$ ANNUAL PREMIUM 5 YEARS 2011 Premium Income Claims Incurred Surplus/ Deficit ENTERED TONNAGE 5 YEARS 2011 Annual Gross Tonnage Not Disclosed 2010 2009 2008 2007 $ 11.

INDUSTRY STATISTICS 35 .

000 US$ 15.000.000 US$ 34.000 N/A 44% 22% 12% 8% 6% 5% 1. 4.5% 36 . 9. we must point out that some of the annualised premium income figures. analysing the various commercial markets is an extremely difficult task.000.800. highlighting the market leaders: COMMERCIAL P&I FIXED PREMIUM (OWNERS P&I) MARKET SHARE BY 2011 PREMIUM INCOME Pos. as the majority of the declared premium income also includes other marine lines.000 US$ 16.000. MARKET BRITISH MARINE RAETSMARINE OSPREY NAVIGATORS INGOSSTRAKH HANSEATIC P&I EAGLE OCEAN ROSGOSSTRAKH HYDOR LODESTAR 2011 PREMIUM INCOME US$ 125. shown below.000 US$ 3.000.000. 5.000 US$ 62. Therefore. • Inconsistencies in figures produced by the individual market facilities. 8.000 US$ 22. do not give a true representation on “pure P&I” income.MARINE P&I COMMERCIAL MARKET REVIEW 2012 INDUSTRY STATISTICS Observing and comparing industry statistics on the various International Group Club’s is relatively easy due to the transparent and consistent nature in which the Club report on account. 3. To establish which P&I facilities command the majority market share. such as H&M and Charterers Liabilities etc.250.000 US$ 2.5% 1% 0. we set out here below a table representing each individual market 2011 premium income. 6.500. 1. by contrast. 10.000 US$ 5. GT and claims figures. This is mainly due to the following reasons: • The individual Markets’ willingness to release accurate premium. 7. 2.800.

400.000 59% 33% 6% 2% 37 .000 US$ 30.500.000.000 US$ 10. 4. 1.000 US$ 11.000 US$ 5.000 59% 33% 6% 2% NON-IG CHARTERERS MARKET SHARE BY 2011 PREMIUM INCOME Pos. 1. 2.COM NON. MARKET CHINA P&I CLUB KOREA P&I CLUB CEYLON P&I CLUB HELLENIC P&I 2011 PREMIUM INCOME US$ 53.WWW.200.100. MARKET RAETSMARINE BV CHARTERERS CLUB NORWEGIAN CHARTERAMA BV 2011 PREMIUM INCOME US$ 33.AJGINTERNATIONAL.2500.000 US$ 27. 2. 3.000.000. 3. 4.000 US$ 1.IG MUTUAL P&I FACILITIES MARKET SHARE BY 2011 PREMIUM INCOME Pos.

and that should you decide to do so that you also understand that AJG (UK) are not responsible for the continuing performance of any security and that any future credit risk associated with renewing the policy with your current insurer will be borne by you. + or . A number of criteria are utilised to evaluate the financial condition of these markets and one of the criteria used is the ratings allocated by either Standard & Poor’s (S&P) or A M Best. Adverse business conditions will likely impart the ability to meet financial commitments. B: BBB: “Good” financial security characteristics. AA: A: “Very Strong” financial security characteristics. where and when it falls below an S&P or AM Best A. This is something that we can discuss with you on an individual case by case basis. you advise us accordingly as soon as possible STANDARD AND POOR’S RATINGS P&I FACILITY BRITISH MARINE CEYLON P&I CHARTERERS P&I CHARTERAMA BV CHINA P&I EAGLE OCEAN HANSEATIC P&I HELLENIC MUTUAL INGOSSTRAKH CURRENT RATING A+ UNRATED AABBB+ UNRATED BB+ A UNRATED BBBP&I FACILITY NORWEGIAN CLUB KOREA P&I CLUB HYDOR LODESTAR MARINE NAVIGATORS P&I OSPREY RAETSMARINE BV ROSGOSSTRAKH LTD CURRENT RATING AUNRATED A+ A A A A+ UNRATED STANDARD AND POOR’S RATINGS ‘Pi’ ratings are based on public data only. Positive attributes exist. In some cases it may be possible to arrange P&I cover with an S&P or AM Best ‘A’ rated carrier on similar terms. We would. if you require us to look at other options in respect of your risk here. requesting that you advise us if you wish us to attempt to source an alternative market.Signs show relative standing within the major rating category 38 .from these agencies as an indicator of acceptable security. BB: “Marginal” financial security characteristics. but is more likely to be affected by adverse business conditions than are higher rated insurers. we would direct your attention to your P&I Insurers financial strength rating. “Strong” financial security characteristics. “Weak” financial security characteristics. The AJG (UK) security policy sets a minimum rating level of A. others are based on a periodic review by S&P analysts. Ratings BB or lower are regarded as having vulnerable characteristics that may outweigh the strengths. It is important that you carefully consider maintaining your insurance with your current P&I insurer where the rating is below the AJG(UK) minimum of A. but is somewhat more likely to be affected by adverse business conditions than are insurers with higher ratings. and are likely to have the ability to meet financial commitments. but adverse business conditions lead to insufficient ability to meet financial requirements. draw your attention to the following ratings and respectfully request that. Accordingly where a security fails to meet the minimum criteria.rating and where this security no longer qualifies for inclusion on the AJG (UK) market security list.MARINE P&I COMMERCIAL MARKET REVIEW 2012 RATING AGENCY ANALYSIS Arthur J Gallagher (UK) Ltd (“AJG (UK)”) operates a market security policy which sets a minimum standard for insurance markets which can be included on its acceptable market security list. therefore. Ratings BBB or higher are regarded as having financial security characteristics that outweigh any vulnerabilities.

INDUSTRY STATISTICS MAJOR LIMITING CONVENTIONS & STATUTES AFFECTING P&I RISKS 39 .

Focus instead seems to be shifting to the offshore/ exploration sector and the oil companies themselves but. Secondly. The provisions of PLR essentially mirror those of the 2002 Protocol to the Athens Convention. Instead of major change. which came into force in June 2009. although there are two areas which may cause problems. 22 States have yet to do so. 40 . These would be in addition to the regular. although none of these have indicated any opposition to it. which was put in place last year and mirrors the CLC/Fund regime has been further delayed in 2011. Clubs have only issued Blue Cards in response to international conventions as opposed to regional regulation. the review lost momentum at the expense of other legislative matters and midterm elections. the MLC requires financial security to be in place to cover abandonment and repatriation of crew where the shipowner becomes insolvent. Most liabilities under the MLC will fall under normal Club cover. The effective date for compliance with the requirement to appoint an approved spill response contractor came into force on 1 January 2012 but Club approval of such operators has been slow-moving. will come into force on 31 December 2012. even here. However. the European Union authorised its Member States to ratify the Convention by the end of 2010. Many EU Member States have indicated that they will require Blue Cards under the PLR.MARINE P&I COMMERCIAL MARKET REVIEW 2012 DEVELOPMENTS IN THE PAST 18 MONTHS POLLUTION LEGISLATION In the wake of the ‘Deepwater Horizon’ incident. without the need for national implementation. inflation-based adjustments. increases in potential liability look set to be less severe than initially called for. In 2007. there was a perhaps understandable call for substantial increases in the OPA 90 and Trust Fund limits in the USA. the MLC makes the shipowner responsible for non-work-related injuries and illnesses and those arising from war. OPA 90 may be amended to insert a mechanism to allow limits to be increased in the future. legislators’ resolve appears to have been weakened in the face of shipowners’ assertions that the problem is not one caused by the carriers of oil and that substantial increases in the shipowners’ liability ought not be warranted. terrorism and bio-chemical hazards. Discussions are under way to ensure that there is a consistent approach on both the need for and the uniformity of Blue Cards under the PLR and the Athens Convention ILO MARITIME LABOUR CONVENTION The ratification of the Maritime Labour Convention (‘MLC’) by Luxembourg in October brings the total of ratifying states to 22. Firstly. Normal Club cover does not fully respond to these risks and so. 5 of which are in the EU. EU Member States are not yet in a position to ratify the Protocol itself and are unlikely to be so by 31 December 2011. EU 3RD MARITIME SAFETY PACKAGE EU Member States have until 1 January 2012 to implement the directives of the EU 3rd Maritime Safety Package. with only minor differences. Subsequent to the knee jerk reaction. shipowners may not be fully insulated from the impact of the MLC. following initial demands for instantaneous action. 30 countries are required to ratify the MLC. which is the part of the 3rd Maritime Safety Package that deals with passenger liabilities. arguably due to a lack of quality in the field. as things stand. Chinese pollution legislation. Traditionally. Pollution legislation was reviewed in Congress and in the Senate but. it having already attained the ‘33% of world tonnage target’ with over 54% represented. however. The Passenger Liability Regulation (‘PLR’).

500 SDR 10.400.56): 1. at 22 November 2011.000.95% of world tonnage.000 Add SDR 500 per GT to the above sum Add SDR 333 per GT to the above aggregate Add SDR 250 per GT to the above aggregate Add SDR 167 per GT to the above aggregate SDR 8.909.COM 1 CONVENTION ON LIMITATION OF LIABILITY FOR MARITIME CLAIMS (LLMC).001-70.63% of world tonnage at 31 October 2011.000 Add SDR 800 per GT to the above sum Add SDR 600 per GT to the above aggregate Add SDR 400 per GT to the above aggregate SDR 20.001-30. At 31 October 2011. SDR 1 = approximately US$ 1.000 GT 30.001-70.000 GT 75. 1976 (IN FORCE 1 DEC 1986) This convention applies to all vessels involved in incidents in signatory states.000 GT 70.001-70.000 GT 70.001 GT or more EXAMPLE 25.AJGINTERNATIONAL.000 GT FORMULA Minimum SDR 167. These limits are now as follows: 2. covering 51.001-30.000 GT 75. except such incidents to which the Civil Liability Convention (See Section 3) applies.1 PERSONAL INJURY/ LOSS O F L I F E VESSEL SIZE 2.000 GT 75.000 GT 30.500 FORMULA Minimum SDR 333.000 GT FORMULA Minimum SDR 2. it has been ratified by 52 states.400.000 GT or less 2.000 2 1996 PROTOCOL TO THE 1976 LLMC (IN FORCE 13 MAY 2004) This amends the limits of compensation payable and has been adopted by 43 states encompassing 45.000 41 .000 GT 30.1 PERSONAL INJURY/ LOSS OF LIFE VESSEL SIZE 500 GT or less 501-3.WWW.001 GT or more EXAMPLE 25.2 PROPERTY VESSEL SIZE 500 GT or less 501-30. Liability under the convention is calculated in accordance with the following formulae (note that.000 GT 1.001 GT or more EXAMPLE 25.000 SDR 50.000 GT 3.000 Add SDR 167 per GT to the above sum Add SDR 125 per GT to the above aggregate Add SDR 83 per GT to the above aggregate SDR 4.000 SDR 21.000 GT 70.508.409.258. The right to limit losses under this convention is lost if the incident involves a personal act or omission carried out intentionally or recklessly and with the knowledge that loss would result.

680. The original Convention has been largely replaced by the 1992 Protocol.000 GT) Example EXAMPLE 25.001 GT or more EXAMPLE 25.1 LIABILITY UNDER CLC (1992 P ROTOCOL VESSEL SIZE FORMULA 5.000 (equivalent to 140.000 GT 70.000 42 .001 GT or more Maximum EXAMPLE 25.000 SDR 25.200.000 GT 75. Liability under the convention is calculated in accordance with the following formulae 3.000 GT or less 5. 1969 (IN FORCE 19 JUNE 1975).000.400.2 LIABILITY UNDER CLC AS AMENDED IN 2000 VESSEL SIZE 5.000 (equivalent to 140.000 SDR 48. Liability is strict and insurance is compulsory.000 3 INTERNATIONAL CONVENTION ON CIVIL LIABILITY FOR OIL POLLUTION DAMAGE (CLC).000 GT or less 2.000 Add SDR 400 per GT to the above sum Add SDR 300 per GT to the above aggregate Add SDR 200 per GT to the above aggregate SDR 10.510.93% of world shipping as at 31 October 2011. PROTOCOL TO CLC.001 GT or more Add SDR 420 per GT to the above sum Maximum SDR 59.400.MARINE P&I COMMERCIAL MARKET REVIEW 2012 2 1996 PROTOCOL TO THE 1976 LLMC (IN FORCE 13 MAY 2004) CONT.000 5.200.000 GT SDR 32. encompassing 96.000 GT FORMULA Minimum SDR 1.700.000 75. 1992 (IN FORCE 30 MAY 1996) The Civil Liability Convention covers those who suffer oil pollution damage resulting from maritime casualties involving oil-carrying ships.001-70. which has been adopted by 126 states.001-30.2 PROPERTY VESSEL SIZE 2.000 GT 30.000 GT or less Minimum SDR 3.000 Add SDR 631 per GT to the above sum SDR 89. The Convention places the liability for such damage on the owner of the ship from which the polluting oil escaped or was discharged.000 GT SDR 11.000 GT 75.770. 2.000 Following the spill resulting from the loss of the “Erika”.130.000 GT) SDR 17.000.000 GT FORMULA Minimum SDR 4. the limits were increased under an amendment in 2000 as follows: 3.

5 SUPPLEMENTARY FUND. 27 states have acceded. all tanker owners indemnify the 2003 Supplementary Fund in respect of 50% of any claim falling on that fund.31% of the world fleet. The total amount of compensation payable for any one incident will be limited to a combined total of SDR 750 million inclusive of the amount of compensation paid under the existing CLC/Fund Convention system. inclusive of the primary contribution under the 1992 CLC Protocol. encompassing 21. via a governmental levy. with such relief being subject to conditions designed to ensure compliance with safety at sea and other conventions. At 31 October 2011. It is managed by an inter-governmental organisation. The Protocol is optional and participation is open to all States which are party to the 1992 Fund Convention. Under STOPIA. 6 TANKER OIL POLLUTION INDEMNIFICATION AGREEMENTS In recognition of the potential disparities between contributions by ship owners and receivers of cargo towards the cost of pollution incidents. covering 94. by way of a protocol adopted in 2000. Under TOPIA. 43 . the Supplementary Fund is financed by levies on receivers of persistent oil cargoes. 108 states have adopted the 1992 Protocol at 31 October 2011. As with the 1992 Fund. 1992 PROTOCOL (IN FORCE 30 MAY 1996) The purpose of this Fund is to provide compensation for pollution damage to the extent that the protection afforded by the 1969 Civil Liability Convention is inadequate. effective 2003.548 GT or less indemnify the 1992 Fund for the difference between their 1992 CLC liability and SDR 20 million. two agreements came into force in 2006 which sought to remedy the situation.WWW. The 2000 protocol increased this maximum sum to SDR 203 million. third tier of compensation. The original 1971 Fund was denunciated in 1998. 2003 (IN FORCE 3 MAR 2005) The aim of this Fund is to supplement the compensation available under the 1992 Civil Liability and Fund Conventions with an additional. inclusive of the ship owners’ primary contribution under the 1992 CLC Protocol.42% of the world fleet.AJGINTERNATIONAL. It is also intended to give relief to ship owners in respect of the additional financial burden imposed on them by the 1969 Civil Liability Convention. the IOPC Funds. The Fund is financed by receivers of persistent oil cargoes in signatory states. The maximum amount payable under the 1992 Protocol was SDR 135 million. being effectively replaced by the 1992 Fund. owners of small tankers of 29.COM 4 INTERNATIONAL CONVENTION ON THE ESTABLISHMENT OF AN INTERNATIONAL FUND FOR COMPENSATION FOR OIL POLLUTION DAMAGE (FUND). Subsequently the limits in that Fund were increased.

000 GT or more Other Vessels US$ 1.000 Double Hull Tanker: 3. The main one of these is OPA 1990.000 Double: US$ 150.496. 1990 The USA is not party to any of the above pollution related conventions.000 GT or more US$ 1.000 US$ 854. Instead.000 GT Single: US$ 225.000.000 GT or less Single Hull Tanker: 3.000 US$ 3.000 75.000. oil products or oil by-products in US waters.088.1 LIMITS OF LIABILITY UNDER OPA 1990 AS AMENDED IN 2006 VESSEL SIZE FORMULA Single Hull Tanker: 3.000 per GT with minimum US$ 17. For tank vessels.000 GT or more US$ 3.000 per GT with minimum US$ 4.000 EXAMPLE 25.000 Double Hull Tanker: 3.000. the above increases were immediate. Further increases are likely every three years.000 Other Vessels US$ 950 per GT with minimum US$ 800. The OSLTF responds where a responsible party denies liability or fails to meet that liability or where the first level of liability is insufficient to fund all claims.000.000 Double: US$ 47.000 GT or less US$ 3.000 per GT with minimum US$ 6. there are specific statutes which affect any vessels discharging oil.000 GT or less US$ 1.000 per GT with minimum EXAMPLE 25.000.000 GT 75.200 per GT with minimum US$ 6.000 GT or less Double Hull Tanker: 3. the US Coast Guard & Maritime Transportation Act 2006 amended limits under OPA 1990 as set out in the table below.000 per GT with minimum US$ 22.000.000.000 Single Hull Tanker: 3.000 Double: US$ 142.000 GT FORMULA US$ 3. 7.000.000 Double: US$ 50.000 US$ 2.000 US$ 2.500.MARINE P&I COMMERCIAL MARKET REVIEW 2012 7 US OIL POLLUTION ACT (OPA).900 per GT with minimum US$ 4.000. 7.2 AMENDED LIMITS OF LIABILITY UNDER OPA 1990 WITH EFFECT FROM 5 FEBRUARY 2010 VESSEL SIZE Single Hull Tanker: 3. which imposes strict liability.272.900 per GT with minimum US$ 16. the only defence being acts of war. These came into effect on a provisional basis on 1 July 2009 and were formally adopted with effect from 5 February 2010.408. acts of God or that the loss was caused solely by the actions of a third party.000 The US Coast Guard has subsequently announced increases in liability limits to reflect inflationary erosions since the 2006 change. they came into force in October 2006. 44 .000 GT Single: US$ 75.400 Single: US$ 80.000.000 Single: US$ 240.000 The US has also established an Oil Spill Liability Trust Fund (‘OSLTF’) which supports OPA 90 and is funded by a tax on oil produced and imported into the USA. For non-tank vessels.500.200 per GT with minimum US$ 23.000 GT or more Double Hull Tanker: 3. In July 2006.

the COFR is generally provided by an independent issuing company.COM 8 US COMPREHENSIVE ENVIRONMENTAL RESPONSE. 1980 This legislation is focused on ‘hazardous substances’. or recklessly and with knowledge that such damage would probably result. This is presently being ratified: so far only 7 states representing 0. EXAMPLE A double hull tanker of 25. or personal injury to. Subsequent to the ratification of this convention (by 25 states to date.AJGINTERNATIONAL. In respect of obligations under both OPA and CERCLA. It establishes a regime of liability for damage suffered by passengers carried on a seagoing vessel. Club cover is discretionary as regards CERCLA-related claims. this limit of liability is set at SDR 46. and covers the aggregate of the CERCLA and OPA limits of liability.000 under OPA 1990 as amended plus US$ 7. unless the carrier acted with intent to cause such damage.500. with an aggregate limit of SDR 340 million. These limits did not change when the OPA 90 limits were raised in July 2009. Certificates of Financial responsibility (COFRs) are required.500. However. A 1990 protocol increasing the limit to SDR 175. he should be able to limit liability. if the incident causing the damage occurred in the course of the carriage and was due to either the fault or neglect of the carrier. there are circumstances where both CERCLA and OPA could apply to an incident involving a shipowner. With effect from 2006.000 under CERCLA.46% of the world’s fleet) the limitation amount has become increasingly inadequate. a passenger.000 was not adopted (being ratified by only 6 minor states) and has been superseded by the 2002 protocol. operator.000 or US$ 300 per GT.30% of world tonnage had done so at the close of October 2011. covering 40. this amount is SDR 250. Liability is further limited for losses arising from acts of terrorism to the practically insurable amount. For the death of. Limits of liability are as follows: A) for vessels over 300 GT carrying a hazardous substance as cargo – the greater of US$ 5 million or US$ 300 per GT. comprising US$ 47.000 per passenger. bareboat charterer etc. 9 ATHENS CONVENTION RELATING TO THE CARRIAGE OF PASSENGERS AND THEIR LUGGAGE BY SEA (PAL). which were adopted in 1961 and 1967 respectively. It declares a carrier liable for damage or loss suffered by a passenger.000 GT will need a COFR of US$ 55 million.666 per passenger. However. 45 . 1974 (IN FORCE 30 APR 1989) The Convention consolidated and harmonized two earlier Brussels Conventions dealing with passengers and luggage. COMPENSATION AND LIABILITY ACT (CERCLA). As Clubs are unwilling to certify financial responsibility as required by the US regulators. B) for any other vessel over 300 GT – the greater of US$ 500.WWW.

in respect of personal injury or death. If this Convention is not ratified by 31 December 2012. applies a limit of SDR 300.04% of the world fleet.61% of the world fleet as at 31 October 2011. by 31 October 2011. particularly in respect of the operations of the second tier of compensation and the difficulty in establishing how much HNS was received in any country. This regulation effectively adopts the Athens Convention into EU law.700 per vehicle SDR 3. covering 89. under the Limitation of Liability Act last modified in 1996. 2010 (NOT YET IN FORCE) The original 1996 HNS Protocol established a two tier compensation regime for amounts up to SDR 250 million and has been ratified by 14 states or 13.1 PROPOSED LIMITS UNDER 2002 PROTOCOL TO PAL TYPE OF LOSS Strict Liability Passenger Personal Injury / Death Operator Negligence Passenger Personal Injury / Death Loss or Damage to Cabin Luggage Loss or Damage to Vehicle and Luggage therein Loss or damage to Other Luggage LIMIT SDR 250.375 per passenger In the interim.MARINE P&I COMMERCIAL MARKET REVIEW 2012 9. For example. as amended by the 1996 Protocol. which seems unlikely. The limits are the same as those imposed under LLMC 1976.000 per passenger SDR 400. which increased the limits applicable. A Focus Group was established in 2007 in order to address administrative concerns of the ratifying states.000 per passenger SDR 2. with a number of minor supplementary clauses. the limits set by the Passenger Liability Regulation (part of the EU Third Maritime Safety Package) will apply to EU Member States. In the USA. a number of individual States have introduced their own legislation. had 62 acceptances. INTERNATIONAL CONVENTION ON LIABILITY AND COMPENSATION FOR DAMAGE IN CONNECTION WITH THE CARRIAGE OF HAZARDOUS AND NOXIOUS SUBSTANCES BY SEA (HNS). in the UK. liability to passengers is limited to US$ 420 times the GT of the vessel.000 per passenger.250 per passenger SDR 12. (BUNKERS) 2001 (IN FORCE 21 NOV 2008) The Bunker Convention reached its required criteria of 18 states’ ratification in November 2007 and. the Merchant Shipping Act 1995. 46 . introduced in the wake of the ‘Herald of Free Enterprise’ loss. 10 11 INTERNATIONAL CONVENTION ON CIVIL LIABILITY FOR BUNKER OIL POLLUTION DAMAGE. The Convention covers pollution caused by spills of oil carried as fuel onboard the vessel.

An additional aim was to update the regimes to reflect modern transportation systems. in attempts to harmonize liability regimes. have been increased beyond Hague-Visby and Hamburg Rules limits. Under this protocol. Whilst 24 have signed the Convention.500. for example. was adopted in April 2010 but has not yet been ratified by any states. Collectively.000 Add SDR 1.000. By 31 October 2011.001-50.000 SDR 104. Thereafter.000 12 UN CONVENTION FOR THE INTERNATIONAL CARRIAGE OF GOODS WHOLLY OR PARTLY BY SEA (ROTTERDAM RULES) 2009 (NOT YET IN FORCE) In 1996.000 SDR 91. the expectation is that it may be some time before the Rules enter into force.001 GT or more Maximum EXAMPLE 25.000. 47 . the total compensation remains the same but the shipowner’s maximum liability for an incident involving packaged HNS is increased from SDR 100 million to SDR 115 million. The obligation of due diligence has been extended to apply throughout the duration of the voyage and limits of liability per package.000 FORMULA – PACK AGE DHNS Minimum SDR 11.000 GT or less 2. This resulted in the ‘Rotterdam Rules’ which became open for signature in September 2009 and will enter into force 12 months after 20 states have ratified it.AJGINTERNATIONAL.WWW.000 Add SDR 1. only 1 state (Spain) has actually ratified it as at 31 October 2011.000 GT 50. The Convention will come into force one year after ratification by the 20th UN Member state.725 per GT to the above Add SDR 414 per GT to the aggregate SDR 115 million SDR 51. the elimination of the ‘nautical fault’ defense. or unit of weight. 24 countries have signed the Rules. The Rotterdam Rules have eroded some of the traditional defenses available to sea carriers.500 per GT to the above Add SDR 360 per GT to the above SDR 100 million SDR 44.11 LIMITS OF LIABILITY UNDER HNS 1996 VESSEL SIZE 2.500. including major shipping nations such as Greece. Although there remains widespread support for the Convention. Norway and the United States. financed by cargo receivers. Shipowners’ liability for bulk HNS remains unchanged at SDR 100 million.COM A revised 2010 protocol.000 GT FORMULA – BULK HNS Minimum SDR 10. based on the findings of the above focus group. Noticeably. compensation would be paid by a second tier HNS Fund. none of the major Asian trading nations have signed the Rules. the United Nations Commission on International Trade Law (UNCITRAL) began a review of laws in the area of the international carriage of goods by sea.000 GT 75. 1.650.175. Additional conditions relate to cargo receiving country contributions. the 24 signatories account for around 25% of world trade. The revised protocol will enter into force eighteen months after at least 12 States (including at least 4 with over 2 million GT) express their consent to be bound by it.

1 CONTRASTING LIABILITY UNDER ‘RULES’ ‘RULE’ Hague (1934) Hague Visby (1968) Hamburg (1978) LIMITATION OF LIABILITY £ 100 per package/unit Higher of SDR 2 per kg or SDR 667 per package Higher of SDR 2.5 times freight on goods subject to an upper limit if lost 2.5 times freight on goods not to exceed limit under rules US N/A Rotterdam (2009) COGSA (1936) 48 .50 per kg or SDR delayed 835 per package/shipping unit Higher of SDR 3 per kg or SDR delayed 875 per package/shipping unit US$ 500 per package/unit LIABILITY FOR DELAY N/A N/A 2.MARINE P&I COMMERCIAL MARKET REVIEW 2012 The table below contrasts the liability under the various regimes: 12.

com NICOLA ELLIS Divisional Director +44(0)20 7204 1892 +44(0)7825 059 643 nicola_ellis@ajg. While every effort has been made to ensure accuracy.com RICHARD STURGEON Divisional Director +44(0)20 7204 1887 +44(0)7825 059 631 richard_sturgeon@ajg.com ISABEL SALCEDO +44(0)20 7204 6210 +44(0)7584 609 336 isabel_salcedo@ajg. Readers should not act upon (or refrain from acting upon) information in this document without first taking further specialist or professional advice. This review does not purport to be comprehensive or to give legal advice. omissions or inaccuracies contained within the document.com SIMON MAUDIT Divisional Director +44(0)20 7204 6203 +44(0)7825 059 521 Simon_maudit@ajg.com WENDY NEEDHAM +44(0)20 7204 1854 +44(0)7557 845 556 wendy_needham@ajg.com ALEX VULLO +44(0)20 7204 1891 +44(0)7500 109 607 alex_vullo@ajg.com JENNY MANKELOW Associate Director +44(0)20 7204 6225 +44(0)7825 609 337 jenny_mankelow@ajg.com LAUREN OSMAN +44(0)20 7204 1885 lauren_osman@ajg. 49 .com DISCLAIMER: The information contained in this market review has been compiled by Gallagher London from information provided by each insurer.com TIM SULLIVAN Divisional Director +44(0)20 7204 6295 +44(0)7500 059 595 tim_sullivan@ajg.AJGINTERNATIONAL.com GARY BRAND Associate Director +44(0)20 7204 6121 +44(0)7825 439 583 gary_brand@ajg.COM CONTACTS JONATHAN SUCKLING Managing Director +44(0)20 7204 6091 +44(0)7825 059 591 jonathan_suckling@ajg.com NICHOLAS WOLFE Divisional Director +44(0)20 7204 8539 +44(0)7500 109 606 nicholas_wolfe@ajg. Gallagher London cannot be held liable for any errors.com MATTHEW CRAMP +44(0)20 7204 6051 +44(0)7825 059 617 matthew_cramp@ajg.WWW.com WAYNE GODFREY +44(0)20 7204 1841 +44(0)7500 109 608 wayne_godfrey@ajg.com MATTHEW MCCABE Divisional Director +44(0)20 7204 6200 +44(0)7825 059 598 matthew_mccabe@ajg.com ANDREW JAMES Executive Director +44(0)20 7204 6059 +44(0)7825 059 536 andrew_james@ajg.com MALCOLM GODFREY Executive Director +44(0)20 7204 1883 +44(0)7789 003 238 malcolm_godfrey@ajg.

Registered address: 9 Alie Street. London.com SD3590_A/13092012 . 1193013 England and Wales.ajginternational. www. Gallagher (UK) Limited which is authorised and regulated by the Financial Services Authority. E1 8DE. Registered No.Gallagher London is a trading name of Arthur J.

Sign up to vote on this title
UsefulNot useful