The West of England is to change its mutual call structure to bring it into line with the rest of the International Group by merging the reinsurance rate into the mutual call.
Since 1992 the Club had applied a rating methodology which separated the International Group’s general excess of loss reinsurance cost for each policy year from the mutual call.
The practice was adopted when Group Reinsurance costs as a proportion of overall Club premium were increasing rapidly, especially for dirty tankers, although today the reinsurance cost for most categories of vessel has reduced proportionately.
In 2018 WoE started a process of simplifying its invoicing by moving from a traditional estimated total call (split across an advance call and additional call) to a net mutual call, but the reinsurance was still charged separately as a fixed amount.
Following a review by the Association, it has been decided that from February 20th 2020 the Club’s calling mechanism will be brought into line with the rest of the International Group. West of England said that this would further simplify the invoicing documentation as the calls would be expressed as a single figure.