No General Increase at Japan Club for 2018 policy year, excluding reinsurance changes

Japan Club has announced that there will be no general increase in advance call rates for owner’s entries for 2018, although this did not include any possible change to the International Group Excess Loss Reinsurance Contract.

The statement came after the 596th meeting of the Association’s Board of Directors, held in Tokyo on November 30th, when open policy years were reviewed, the 2018 renewal was decided and proposed alterations to the Rules of the Association were adopted.

The Club noted that the world economy was “growing solidly”, with a gradual recovery evident in the shipping industry, although not across the board.

As of October 20th the Club said that the total number of vessels entered with Japan Club has been maintained at 4,345, with an aggregate of 93.92m gt.

The Club said that H1 2017 policy year had seen a favourable claims trend for ocean-going vessels (mutual entries), as was the case the previous year. However, since then the loss record had worsened due to some large claims. The claims trend for coastal vessels (Naiko Class, fixed premium entries) had been positive, an improvement on 2016, although the Club noted that claims occurrences thended to increase in number during the winter season in the Northern Hemisphere.

For 2018 there would be no general increase in advance call rates for owner’s entries, although call rates might be adjusted where necessary if there was any change in the cost of the International Group Excess Loss Reinsurance Contract. As was normal, members would be individually underwritten in the light of the above adjustment (if any) and their claims record.

The estimated supplementary call was set at 40% of advance call, and the release call at 45%.

Owners’ Entries:

For the 2014 Policy Year the original supplementary call estimate was 40%. In January 2016 supplementary calls of 20% were levied. The Board decided to close the year without a further supplementary call.

For the 2015 Policy Year it was not expected that there would be any significant change in the future. The originally-estimated supplementary call of 30% was levied in January 2016 against the original estimated figure of 40%. As no significant change was expected in the future, the further supplementary call would be changed to 0% and the release call rate to 5%, with the year remaining open.

For the 2016 Policy Year it was not expected that there would be any significant change in the future. The Board has decided that a supplementary call of 30% would be levied against the original estimated figure of 40%. The further estimated supplementary call rate was reduced to 10% and the estimated release call rate was reduced to 15%.

For the 2017 Policy Year the original supplementary call estimate was 40% and the release call was 45%. The position for this year remained unchanged.

Charterers’ entries:

For the 2018 Policy Year there would be no general increase in premiums for charterers’ entries.

FD&D Cover:

For the 2018 Policy Year there would be no general increase in advance calls for FD&D entries. The estimated supplementary call was set at 20% of the advance call, and the release call at 25%.

For the 2014 Policy Year (Charterers) the original supplementary call estimate was 20%. The Board decided to close the year without levying the estimated supplementary call of 20%.

For the 2015 Policy Year it was not expected that there would be any significant change in the future. The estimated supplementary call of 20% and release call rates of 25% for the 2015 Policy Year remained unchanged.

For the 2016 Policy Year the estimated supplementary call of 20% and release call rates of 25% for the 2016 Policy Year remained unchanged.

For the 2017 Policy Year the estimated supplementary call of 20% and release call rates of 25% for the 2017 Policy Year remained unchanged.

Naiko Class entries:

For the 2018 Policy Year there would be no general increase in premiums for Naiko Class entries.