Mediterranean Shipping Co (MSC) — recently crowned as the world’s largest container ship operator — has parted company with protection and indemnity insurer West of England after more than two decades.
The move is one of the biggest amid frenzied club swapping at this year’s P&I renewal. Clubs are calling for double-digit increases in annual premium while also turning up the heat on owners with an adverse claims record, putting them at odds with their shipowner members.
Broking sources suggest that MSC was one of a number of shipowners that were not offered renewal terms by the West of England. The mutual insurer is seeking to cut claims and rebuild its balance sheet after running up an underwriting deficit over recent years.
A source at the West of England said it had a long-standing relationship with MSC for more than 20 years and described the separation as “amicable”. TradeWinds is told the move is part of the West of England’s management strategy to de-risk the mutual business.
The West of England is asking for a 15% general increase in premium from its members at renewal. MSC has now consolidated its P&I insurance cover and has shifted its West of England ships to its other P&I providers — Steamship Mutual, the Standard Club, the UK P&I Club and North P&I Club.
All 13 members of the International Group of P&I Clubs have been asking for increases of up to 15% from members to try to return their underwriting to break-even. The rises come after an exceptional two years of Covid-19 lockdowns and International Group pool claims.
This year, the 20 February renewal deadline falls on a Sunday. Brokers and underwriters are set to work through the weekend to close the few remaining last-minute negotiations, which were likened to a “power game”, with neither side ready to back down.
Clubs have committed themselves to raising premiums, but some owners contend the increases are unnecessary, making this renewal the most fractious for many years.
Some brokers have been complaining that they did not deliver renewal offers until late, in a tactic they assume was intended to limit negotiating time.
Greek companies appear to be among the most active in moving tonnage around the clubs.
Eastern Mediterranean Maritime has departed the UK Club to consolidate tonnage with the Standard Club and its other insurer, Britannia P&I.
London Club members were hit by a painful supplementary call this year amounting to an additional year’s premium.
Greece’s Goldenport Shipmanagement, whose chief executive John Dragnis sits on the London Club members’ committee, has also moved tonnage out of the club and consolidated it in Britannia P&I.
The American Club is another mutual that recently made a supplementary call from its members and is set to lose some ships from its membership, including long-standing Aegean Shipping.
The London Club is also understood to have lost tonnage from Israeli-based XT Shipping Group to Britannia.
In another move, Navigator Gas’ acquisition of Ultra Gas has also seen a consolidation of its P&I cover, with tonnage being moved over from Britannia to the Standard Club and Steamship Mutual.
Skuld is understood to have lost the floating production storage and offloading account of energy company TotalEnergies to the Standard Club.
North P&I Club is also understood to have lost a major account.
