Tradewinds Marine Risk Forum 2012
Yesterday saw the final day of Tradewinds Marine Risk Forum 2012. The first session of the day saw discussion on how P & I clubs can stay competitive against a backdrop of the financial struggles faced by shipowners, how the clubs are broadening their product range and whether ‘small’ shipowners are subsidising new ships in the mutual system.
The main themes running through the speeches of the session were that price does not equate to value, so when P&I clubs are unable to drop their prices they can add value for members by differentiating their offering and including more within it to work for the collective interest. It was also suggested that small shipowners be given the choice between entering the club as a mutual member or paying a fixed premium so that they can avoid subsidising others’ membership. Of particular note was Joe Hughes’ prediction that given the difficult medium-term outlook for shipowners unrealistic pricing will end.
The second session covered how insurers and brokers are responding to the current market and dealt with the volatility of their investments. It was suggested that insurers are responding by not asking for an increase from owners that can demonstrate theri commitment to due dilligence, that they are succeeding in expansion and that they don’t flit between insurers. Where they could go further is to allow longer credit and be more transparent and cost-conscious, spelling an end to lavish parties. Insurers are capable of helping to reduce cost by charging a one-off payment when a shipowner has made lots of claims as opposed to raising the rate, and charging lower rates for 24 month policies.
The sessions of the day stimulated useful discussion and gave insight into some of the issues faced by the industry and how it is, and will, respond.