Increased frequency of fires a major concern for IG clubs: Tysers

The almost doubling in the frequency of cargo-related fires in the past year or so must be a matter of increasing concern to shipowners, said international broker Tysers in its just published Tysers P&I Report 2019.

Over the past 20 years It has been estimated that a cargo-related fire on a container ship has occurred every 60 days, but during 2019 this average increased to one every 30 days. One of the main problem cargoes had been identified as charcoal/carbon said Tysers.

Container lines, the Clubs and other interested bodies were making serious efforts to mitigate the problems, with the major issue appearing to be the correct handling, description and categorization of dangerous cargoes.

Tysers noted that logistics insurer TT Club stated in a circular in September that “the casualty rate in 2019 is not a comfortable reality for any industry stakeholder – whether the shipper community, logistics and ship operators or the diverse range of insurance providers – and highlights the need to galvanise actions to improve safety, protecting lives and the environment, as well as ships, cargo and equipment.”

Other concerns for the Clubs included continued problems with liquefaction of ore cargoes from Indonesia and the Philippines. Tysers highlighted the likely loss of 25 crew members who were aboard sunken bulk carrier Nur Allya, recently discovered in Indonesian waters at a depth of nearly 1km after not being heard of since August 20th.

Meanwhile, Tysers noted that the combined ratios of the Clubs averaged 111% in 2018/19 compared with 104% the previous year. Only Japan Club, Skuld and Swedish Club came in at under 100%. The worst performer for the second year running, and by some distance, was the London Club at 140%, said Tysers, adding that “we did warn this Club last year that a poor investment climate or run of large claims would see free reserves eroded quickly”, The broker felt then that the best way forward for London would be to merge with another Group Club “while the going is comparatively good.”

Tysers observed that London Club’s free reserves had since dropped by more than 13%.

Summary of 2018/19 Results

Club U/W Profit/Loss 2018/19 ($M) Net Combined Ratio 2018/19 Investment Income 2018/19 ($M) Surplus Feb 2019 ($M) Free Reserves Feb 2019 ($M) Total Owned GT Feb 2019 (M) Free Reserves Per Owned GT Feb 2019
American (12) 116% (1) (12) 45 19 $2.42
Britannia* (22) 112.56% (1) (24) 588 112 $5.25
Gard (98) 116% (9) (90) 1,158 229 $5.05
Japan 3 95% 8 11 238 95 $2.49
London (34) 140.10% 8 (26) 169 51 $3.30
North (13) 105.10% 26 13 463 147 $3.15
Shipowners (8) 104.20% (29) (38) 304 27 $11.15
Skuld 8 98% 1 11 453 92 $4.93
Standard (49) 113% 4 (45) 435 130 $3.34
Steamship (41) 116.10% 14 (27) 467 86 $5.46
Swedish (4) 99% (6) (10) 204 47 $4.29
UK (37) 114% 6 (32) 505 144 $3.51
West (26) 114% 24 (2) 306 93 $3.30
  Total (333) Average 111% Total 45 Total (288) Total 5,335 Total 1,272 Average $4.19

All figures are net of reductions in deferred calls. Capital distributions are reflected in free reserves.

Figures in italic are consolidated figures covering all lines of business rather than P&I alone.

* Britannia includes Boudicca. r in t)