3rd December 2021
FDD Mutual Entries
- A 7.5% general increase ordered.
In summarising the announced general increase the club notes that in recent years it hasseen some upward movement in claims levels which in 2020 and beyond was drivenlargely by IMO sulphur related issues. General charterparty related disputes continue todominate the underlying claims picture as do disputes relating to MOA and newbuildingcontracts. Inflation in claims costs is also noted as becoming more noticeable. The costsof arbitration or court proceedings are significant irrespective of the jurisdiction whereproceedings are taking place. At the present time claims costs inflation combined with ahardening reinsurance market, and an expectation of higher global inflation generally,means that combined loss ratios will almost certainly suffer as a result.
In view of this and noting that it is essential that the Club’s underwriting base andcombined ratio is maintained around breakeven levels over the medium term so that theClub can maintain its strong capital position rather than allowing it to deteriorate, theDirectors have decided that a general increase in premium of 7.5% is necessary in orderto achieve this aim. Premium adjustments will of course be subject to Members’ individualexposure and claims experience.
With regard to continuity credits, the club notes that this programme has operatedsuccessfully since 2014. It has been allocated between a full fleet credit of 2.5% for thoseMembers entering their full fleet with the Club, and a further amount depending on theClub’s overall financial position in any given year. This latter distribution is determinedannually in June and is then offset against the August premium instalment. The full fleetcredit of 2.5% will be maintained for the 2022/23 policy year.
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P.L. FERRARI & CO S.r.l.