London: With freight rates continuing to be in dangerously low territory, the knock on effect for the P&I sector is that it is increasingly hard to operate for smaller clubs, reckons the boss of one of the big names in P&I.
Jeremy Grose is the chief executive of Charles Taylor Management Services, which runs the Standard Club as well as a number of other insurance related brands.
“The continued global economic uncertainty for shipowners and volatility of investment returns for clubs means that clubs need to focus on operational efficiency and driving out unnecessary costs,” he tells Maritime CEO, adding: “This will mean that clubs will continue to focus on keeping their rates low which will favour financially strong clubs such as the Standard Club.”
Grose warns that the tricky financial conditions are likely to bring more accidents.
“Pressures on shipowners could impact operating standards and crew training,” he says, “and it will be more important than ever that clubs are conscious of the quality of management of their members.”
Charles Taylor plc, which yesterday unveiled a £30.6m ($44.8m) rights issue, is a leading provider of professional services to clients across the global insurance market. The group employs more than 1,200 staff in 62 offices spread across 27 countries in the UK, the Americas, Asia Pacific, Europe and the Middle East.
As well as the Standard Club, Charles Taylor provides administration services to the Offshore Pollution Liability Association. It is also manager of the Signal Mutual, the largest provider of longshore workers’ compensation insurance to the US maritime industry and SCALA, which provides marine workers compensation to the majority of Canada’s shipowners. Most recently Charles Taylor added The Strike Club to its roster of insurance brands.
In early March this year, Charles Taylor acquired three of the operating companies of SC Management, the independent, dedicated management companies of The Strike Club. In connection with the acquisition, Charles Taylor was appointed to take over the management of The Strike Club. The existing Strike Club team joined Charles Taylor as part of the transaction.
The Strike Club is the only dedicated mutual insurer covering the running costs of vessels delayed by strikes, shore delays, collisions, groundings and other incidents outside an owner’s or charterer’s control. In addition to mutual delay cover, it also offers war and loss of earnings cover on a fixed premium basis.
“We are delighted that the board of The Strike Club has awarded its management contract to Charles Taylor. We believe there is significant potential to further grow the business and further increase the club’s financial strength,” Grose tells Maritime CEO.
On P&I renewals, Grose says the Standard Club met its targets this time round. Insured tonnage is 135m gt, representing a 3% increase over the policy year. Eight new members joined the club.
The other recent news concerning the club has been the establishment last month of Singapore’s first domestic war risks mutual.
The Singapore War Risks Mutual (SWRM) was launched by Standard Asia and already has more than 100 ships committed.
“Since the launch, there has been considerable further interest from both shipowners and brokers in Singapore and we expect SWRM to continue to grow throughout the year,” Grose concludes.