Japan Club announces 10% owners’ entries General Increase, deductibles rise

In Japan Club’s report on the 605th Meeting of the Board of Directors, it said that there would be a 10% General Increase in advance call rates for owners’ entries.

The Club said that as of September 30th 2020 (the half-way point in Japan Club’s financial year), the total number of vessels entered had been maintained at 4,226, weighing 100.3m gt in total.

Claims received by the Association in the 2020 policy year had seen the loss record for ocean-going vessels worsen, with the cost of large claims increasing in H1 compared to recent years. The loss record for coastal vessels (Naiko Class, fixed premium entries) was stable for H1, compared to recent years.

Calls and Premiums

(1) Owners’ entries, 2021 Policy Year Advance Call. There will be a 10% general increase in advance call rates for Owners’ entries. In addition, Members’ rates will be adjusted as appropriate to reflect their individual claims record, as well as any changes in the cost of the International Group’s reinsurance programme.

The estimated supplementary call for this year is set at 40% of advance call, and the release call at 45%.

Deductibles will be increased.

Crew: $5,000 each accident or occurrence (up from $3,000)

Cargo: $15,000 each single voyage (up from $10,000)

All Others: $10,000 each accident or occurrence (up from $5,000)

(2) Charterers’ entries, 2021 Policy Year. There will be no general increase in premiums for charterers’ entries.

(3) FD&D cover, 2021 Policy Year. There will be no general increase in advance calls for FD&D cover. The estimated supplementary call for this year is set at 20% of advance call, and the release call at 25%.

(4) Naiko Class entries, 2021 Policy Year. There will be no general increase in premiums for Naiko Class entries.

Summary for owners’ entries:

Policy Year Original Supplementary Call Estimate Paid Supplementary Call Board’s Decision Release Call
2017 40% 40% Closed Closed
2018 40% 40% No further supplementary call is expected, with the year remaining open. 5%
2019 40% 0% A supplementary call of 40% due for payment by 29 January 2021. 5%
2020 40% The position remains unchanged. 45%
2021 40% A 10% general increase to be applied to advance call rates. 45%

Laid-up returns percentage is cut

This provision is for Owners’ entries, Charterers’ entries and Naiko Class entries. If a ship, completely free from cargo, is laid-up in any safe port or place for a period of 30 or more consecutive days after finally mooring there, Members will be entitled to a return of calls or premiums paid attributable to the period of layup (the period shall be computed from the day of arrival to the day of departure, one day only being excluded) for their Entered Ship by multiplying the following return rate (the rate has been reviewed and reduced from previous years):

  • 40% if the ship is laid-up with crew on board (from 60%)
  • 40% if the ship is laid-up with no crew other than for maintenance or security (from 75%).

Changing the calling basis: Mutual Premium system

As decided at the 602nd Meeting of the Association’s Board of Directors in November 2019,  Japan Club has continued to consider application of the Mutual Premium system. “We will not, however, apply this system for the 2021 policy year, given the changes in the standard deductibles and the rate of laid-up returns as described above. We will continue to consider its future application”, the Club said.

There was also an alteration to the Rules (effective from February 20th 2021) clarifying the situation regarding Rule 28, quarantine expenses. The amended rule makes it clear that an outbreak of infectious disease “on board” is the coverage trigger.