Gard introduces owners’ general discount on ETC, FDD to be fixed premium

The board of Norway-based marine insurer Gard has approved a new premium policy for mutual Members which will come into effect at the beginning of policy year 2021-22 on February 20th 2021.

Gard is introducing an Owners’ General Discount on the Estimated Total Call (ETC). Each November the Board will decide if Gard’s capital position allows for the discount. This will be deducted as a percentage of the ETC premium for the following policy year. It applies to renewed entries and pro rata for ships entered during the policy year only, provided Gard is the “holding club” according to the IGA.

The entire ETC premium, less the Owners’ General Discount, will be invoiced in three equal instalments.

For the 2021 policy year Gard will apply a 5% Owners’ General Discount, which is in addition to the 5% reduction in the last instalment of the ETC for the 2019 policy (announced on November 6th). This will replace any reduction in the last instalment of the ETC for mutual Members. Instead of a General Increase, individual members rates will be adjusted to reflect their risk profile and claims record.

Gard has also decided that from next policy year on, Owners’ Defence cover (FDD) will be offered as a fixed premium product, “along with a wide range of supplementary covers to Owners’ Mutual P&I.”

Gard CEO Rolf Thore Roppestad said that “the premium policy for Mutual P&I balances the need for capital for the Gard group against the burden of premiums Members pay as owners of the group. The group’s strong results in recent years have been positive for our Members making the cost of our products lower. However, our previous practice of deferring any reduction in the ETC premium until several months after the end of the policy year in question has made budgeting harder for shipowners and makes it even harder for Members to appreciate the fact that the group’s superior performance has delivered lower prices.”

He said that it was this which had driven Gard’s review of the philosophy underpinning its model and the proposed changes. “By bringing the discount forward to the beginning of the policy year, we aim to give our Members much greater transparency and predictability as to the real cost of buying mutual P&I products with Gard and rewarding them for being part of a strongly performing Club.”