The Swedish Club’s Hull Action Plan is beginning to bite. Managing Director Lars Rhodin told members of the Club’s Board, meeting in Munich yesterday, that real progress had been made in setting Hull & Machinery (H&M) premiums commensurate with risk exposure.

Lars Rhodin said: “The hull market has significantly underestimated claims inflation levels. Most players have been content to rely on an inflation estimate of five per cent. In reality, the true figure is much higher,  as a result of the protracted shipping boom, high steel prices, limited yard capacity, currency movements and a host of other factors.

“Our Hull Action Plan addresses this important issue in a vigorous way. If necessary we will accept a loss of H&M tonnage in order to maintain best practice and sound underwriting. We expect some of our Hull members to make changes, to take advantage of the unrealistic rates still available in some sectors of the market. Those markets however are unable to deliver similar high levels of services. In other words, they represent a different value. Our job is to ensure we are ready to act and expand further when market rates, in general, have increased to the point where they reflect realities. This process is already under way in the wider market and the current financial turmoil is accelerating this trend. H&M rates will continue to harden. Meanwhile, now is the time for members and other shipowners to take action to enhance risk management, by utilising the Club’s Maritime Resource Management (MRM) training for sea staff. MRM focuses on the critical behavioural aspects underlying safety. It is an excellent tool for reducing risk exposure and the comensurate premium.

In addressing The Swedish Club’s Board, Lars Rhodin added: “Our current overall technical underwriting result is close to be in balance. We still have some way to go, however, before rates truly reflect exposure. Fortunately the Hull Action Plan is working well and we expect further progress in 2009”.

Contact:
Henric Gard. The Swedish Club, Telephone: +46 31 638 400
TRS Public Relations, Telephone: +44 1304 813 366

The Swedish Club
The Swedish Club was founded in 1872. It is a leading mutual marine insurance company, owned and controlled by its members. The Club writes Hull & Machinery, War Risks, Protection & Indemnity, Loss of Hire, Freight Demurrage & Defence and any additional insurances required by shipowners. The head office is located in Göteborg, Sweden, and branch offices are located in Piraeus, Hong Kong and Tokyo.

As at October 1st the Club covered 1,486 vessels for Hull & Machinery, 1,327 vessels for P&I and 663 vessels for FD&D.