The International Group of Protection & Indemnity Clubs looks set to be hit with its highest level of pool claims since 2013, with a series of recent costly claims expected to be notified to the group before the end of the P&I year on 20 February.
Claims above $10m must be made known to the International Group as shared pool claims.
The current policy year's most costly pool claim estimates notified to the International Group involve the 15,262-teu Maersk Honam (built 2017), 1,118-teu SSL Kolkata (built 2006), 37,499-dwt Bow Jubail (built 1996) and 4,730-teu APL Los Angeles (built 2008).
These claims collectively add up to around $234m — a figure that already exceeds the 2017 pool claims estimate of $227m.
Notable casualties
However, a series of casualties from this month have yet to be notified to the pool.
The most notable of these incidents were the fires on the 7,510-teu containership Yantian Express (built 2002) off the coast of Canada and the 6,400-ceu car carrier Sincerity Ace (built 2009) in the Pacific, as well as the partial sinking of the 147-metre pipelayer Star Centurion (built 2002) following its collision with the 40,000-dwt product tanker Antea (built 2002) off Bintan Island, Indonesia.
Each of the recent casualties are being talked about as potentially generating claims on a par with the Maersk Honam, which is estimated to be around $100m.
The past four years have seen the International Group’s pool claims estimates all fall below $300m — and 2013 was the last time that figure was exceeded, following the Costa Concordia disaster, when an estimated $411m in pool claims was notified.
Many are expecting the final 2018 figure to run close to the 2013 level.
A low pool claims environment has been cited as one of the reasons the P&I clubs have been able to keep premiums down over the past three years.
Underwriting struggles
Equally concerned over the recent casualties will be struggling hull underwriters, which have been able to get through the low premium environment because of low claims levels.
In August, the Nordic Association of Marine Insurers — also known as Cefor— commented on the low claims environment in the hull market.
“Since 2015, no losses have been reported exceeding $30m," it said. "The largest loss since 2015 occurred in 2017 and had a cost of $26m, the second-largest in the first quarter of 2018 at a cost of $25m.”
But since then hull underwriters have paid out a record $700m for the loss of an under-construction luxury yacht newbuilding in a fire at German shipyard Lurssen in September 2018.
As reported last week, Gard is the lead hull underwriter for the Star Centurion, which is covered for $175m. However, the Norwegian mutual declined to comment on whether it considers the partially sunken ship a constructive total loss yet.
RSA, Swiss Re and Axis are also reportedly included in the Star Centurion's hull cover, while P&I cover on the vessel is provided by the Shipowners’ Club.
