Hellenic War snips 10% from annual premium
Club that covers most of the Greek fleet against piracy risks continues to cut rates
The fleet covered by the Hellenic Mutual War Risks Association has passed the $100bn insured value mark for the first time.
The club, which provides cover for more than 2,600 vessels, accounting for three quarters of Greek-owned tonnage, cut annual premiums by 10% at the New Year renewal.
The reduction is below the 30% for 2017, savings of 20% in both 2016 and 2015 and a 45% cut in 2014 — but there is a limit to quite how low premiums can go.
The annual premiums charged by the Hellenic War Risks Club are tariff based, with cargoships paying a basic 0.00222% of their insured value, passenger ferries 0.00535% and cruiseships 0.01069%.
So annual cover for a bulker, tanker or containership, valued at $50m, has fallen to a miniscule $1,100 per year for 2018, compared to a still modest $6,025 in 2010.
The graph (below) shows the scale of reduction in annual premiums since 2010.
However, the annual premium is only the starting point.
Rates are further reduced by a volume discount that starts at 20% for fleets valued up to $100m and gradually rises to 50% for fleets insured for more than $1bn.
However, additional premiums are payable for ships entering higher-risk areas, such as much of the Middle East or West Africa.
A compulsory deductible of $30,000 for each and every claim arising from piracy or violent theft remains unchanged for 2018.
The club reports a high member retention level at the renewal, although some owners are still reducing the insured value of their vessels.
There were fewer than 10 claims in 2017, with the most notable incident being the kidnapping of a West African crew.
A favourable claims record meant there was a flat reinsurance renewal, despite some market jitters over the impact of recent hurricanes and wildfires.
Meanwhile, the shipowner directors of the United Kingdom Mutual War Risks Association are to meet next week to decide strategy for the club’s renewal on 20 February.
The Hellenic and UK war risks clubs are under the same Thomas Miller management, operate in the same risk segment and are subject to similar external influences, so the former provides a hint about the latter.
But the Hellenic is bigger, with greater economies of scale than its UK sister club — covering about 1,000 ships insured for $19bn — so traditionally it has been able to offer members slightly better pricing.
The Hellenic War Risks Club, chaired by Michael Lykiardopulo of Neda Maritime, has many prominent Greek shipowners as members, including Angelicoussis, Caroussis, Embiricos, Fafalios, Frangou, both Goulandris companies, Goumas, Hajioannou, Kollakis, Laskaridis, two Lemos family firms, Livanos, Los, Lyras, Martinos, two Pateras outfits and Veniamis.