Japan Club announces 7.5% general increase

At Japan Club’s 602nd Meeting of the Association’s Board of Directors, held in Tokyo on November 26th to review open policy years, decide on the 2020 renewal, and adopt proposed alterations to the Rules of the Association, the board decided on a 7.5% general increase.

The Board said that it had considered applying the Mutual Premium system instead of its Supplementary Call system for the 2020 policy year. However, it decided not to “as we came to the conclusion that we should further consider the best way for the Members and the Association to change the calling basis including the transition measures and timing”. The Club said that it would continue to consider application of the Mutual Premium system for the 2021 policy year onwards.

As of October 31st this year the total number of vessels entered with Japan Club had been maintained at 4,251, across 98.83m gt in the aggregate.

The Club observed that, on the claims side, the loss record for ocean-going vessels was worsening because of some significant accidents which occurred in the first half of the year, plus the impact of Typhoon Faxai.

The loss record for coastal vessels (Naiko Class, fixed premium entries) had remained stable compared to last year. “However, the result has not been great and we must keep an eye on forthcoming developments”, the Club said.

For the 2020 Policy Year there will be a 7.5% general increase in advance call rates for owner’s entries. The estimated supplementary call was set at 40% of advance call, and the release call at 45%.

For 2016 Policy Year the original supplementary call estimate was 40%. In January 2018 supplementary calls of 30% were levied. The Board will close the year without a further supplementary call.

For 2017 Policy Year it was not expected that there would be any significant change in the future. The originally-estimated supplementary call of 40% was levied in January 2019. In view of the present situation, the board has decided that a further supplementary call will remain at 0% and the release call rate at 5%, with the year remaining open.

For 2018 Policy Year the policy year’s loss record was 105.0%. It was not expected that there would be a significant change in the future. The Board decided that a supplementary call of 40% would be levied, as originally estimated. The further estimated supplementary call rate was reduced to 0% and the estimated release call rate was reduced to 5%.

For 2019 Policy Year the original supplementary call estimate was 40% and the release call was 45%. The position for this year remains unchanged.

Charterers’ entries

For 2020 Policy Year there will be no general increase in premiums for charterers’ entries.

FD&D cover

For the 2020 Policy YearThere will be no general increase in advance calls for FD&D cover. The estimated supplementary call was set at 20% of the advance call, and the release call at 25%.

For the 2016 Policy YearThe original supplementary call estimate was 20%. The Board decided to close the year without levying the estimated supplementary call of 20%.

For the 2017 Policy Year Japan Club anticipated nosignificant change in the future. The estimated supplementary call of 20% and release call rates of 25% for the 2017 Policy Year remain unchanged.

For the 2018 Policy Year the estimated supplementary call of 20% and release call rates of 25% for the 2018 Policy Year remain unchanged.

For the 2019 Policy Year the estimated supplementary call of 20% and release call rates of 25% for the 2019 Policy Year remain unchanged.

Release calls under Owners’ entries and FD&D cover above are set at 5% with no exception for any open policy year, further to a comprehensive examination of various risk factors, such as premium, market, operations, counterparty default, etc.

For the 2020 Policy Year there will be no general increase in premiums for Naiko Class entries.

Laid-up returns

For Oceangoing vessels insurance, special cover for charterers and Naiko Class insurance, if the ship, completely free from cargo, is laid-up in any safe port or place for a period of thirty or more consecutive days after finally mooring there (the period shall be computed from the day of arrival to the day of departure, one day only being excluded), a Member is entitled to a return of calls or premiums paid attributable to the period of layup for his Entered Ship by multiplying the following return rate.

60% if the ship is laid-up with its crew on board

75% if the ship is laid-up without its crew (excluding security personnel) on board.

https://www.piclub.or.jp/en/news/30031