The claims experience in 2015/16 was particularly benign, with P&I claims reported being both low in number and in value. There were only 19 large claims (in excess of US$1 million in value) reported, compared to 50 such claims reported the previous year. The technical underwriting result is particularly sensitive to this relatively small segment of high value large claims.
This large claims experience in 2015/16 also compares favourably with the recent experience of the last five years.
In addition, attritional claims (less than US$1 million in value) have also been significantly fewer in number, with 1,000 fewer claims reported compared to the previous year. Again, the attritional claims experience in 2015/16 compares favourably with the recent experience of the last five years.
Given the continuing difficult economic environment, pursuing and defending claims for uninsured losses and protecting their assets as far as possible has never been so important to our Members. North is well placed to provide the highest levels of legal support through a large team of over 30 qualified lawyers.
Working from the Club’s offices in Newcastle, Piraeus and Singapore, the team handles the majority of legal work in-house. This year, a large number of our Members were affected by the fallout from the demise of the OW Bunker Group and our FD&D team has been actively involved in protecting Members’ interests in the numerous actions that have been brought against them. The team works actively within external legal and industry forums to help deal with the varying legal issues affecting shipping, therefore providing wider protection for Members.
The Loss Prevention team have for a number of years engaged in an ongoing analysis of large claims which have identified two frequent root causes – seafarer standards and the safety culture on board ships (the lack of which is often evidenced by poor operational practices). Both these issues have been concerns for the industry for some time and with the shortage of Officers forecast to be more acute in the future, the recruitment and retention of good quality Officers may become increasingly problematic for shipowners. The Club is therefore focusing its loss prevention effort towards the human element in shipping, reflected across the various publications, advice and general support for Members in this area. This has also fed into the inter-departmental collaboration within the Club on the Member Review programme, which has delivered tangible benefits in terms of the improving quality of the membership.
The Club has also been actively involved with a number of industry initiatives during the past year, aimed at reducing claims and enhancing vessel safety, for example:
- The ongoing initiative within the IG and with the Cargo Incident Notification System (CINS), to produce guidelines for the carriage of calcium hypochlorite and aimed at reducing the risk of fires posed by this cargo, as well as those associated with other dangerous containerised cargoes.
- The collaboration with Company Security Officer Alliance (CSOA) to assist Members’ CSOs in protecting their seafarers and vessels from piracy, stowaways and fraud.
- Close monitoring of developments in the implementation of the Verified Gross Mass (VGM) requirement for containers shipped by sea.