Premium rises not linked to IMO 2020, says North Club
Chief executive Paul Jennings does not see any correlation between recently announced general increases in premiums and the transition to low sulphur marine fuels. The signs are pointing to a greater likelihood of contractual disputes, he says
Most P&I Clubs have raised premiums recently but these are not driven by the risks associated with IMO 2020, Mr Jennings suggests
THE chief executive of North of England P&I Club, Paul Jennings, does not see any basis as yet to levy any additional premium relating to the risks linked to the mandatory low-sulphur transition being forced on international shipping.
Drawing on his observations, Mr Jennings suggested that major shipowners appeared to have taken steps to test fuel quality and to prepare their bunkering operations before the International Maritime Organization’s 0.5% limit on sulphur in marine fuels takes effect on January 1.
These can go towards mitigating the risks of any increase in claims owing to crew casualties.
On the flip side, he said that there are signs of more “contractual” rather than “physical” issues surfacing post-IMO 2020 implementation.
“We expect to see disputes over fuel types and availability.”
He also holds the view that P&I Clubs generally should not have responded so far to any need to raise premiums to cover potential jumps in claims spilling over from the low-sulphur transition.
Even so, several P&I Clubs have raised their premiums from next year.
In late November, North Club unveiled a 7.5% general increase on members’ premiums for renewals from February. That came weeks after the Standard Club announced a raise of the same quantum, citing an increase in the number and the scale of larger claims.
Mr Jennings was speaking to Lloyd’s List on the sidelines of an event hosted by the International Group of P&I Clubs. North is one the 13 International Group clubs.
International Group’s chief executive Nick Shaw said that the P&I clubs associated with the group would collect data relating to bunker-related incidents from January 1.
IG wants to harness such data to alert members of the 13 clubs about any “hot spots” relating to bunker incidents around the world.
The 13 P&I clubs cover more than 90% of the world’s oceangoing tonnage.