Appreciation for the 2023 Renewal
To the Members
Hiroaki Sawabe, Executive Director
We would like to express our deepest appreciation to all our Members for the 2023 policy year renewal, and to report on its outcome.
The business environment for this renewal was not easy. We had to collect additional calls of 25% for ocean-going vessels insurance for the policy year 2020 and 2021, because the loss records for those years had deteriorated more than expected, due to the impact of pool claims and COVID-19 related claims. In policy year 2022, pool claims for the International Group of P&I Clubs decreased, and COVID-19 related claims also seem to have peaked, as they are now decreasing. However, we decided to apply a general increase of 10% for the policy year 2023, as we had done for 2021 and 2022, since the balance of insurance income and expenditure continues to be insufficient, and we expect an increase in claims costs due to inflation.
As for the coastal vessels insurance, the balance of income and expenditure worsened in the policy year 2021. This was due to a large claim causing the highest claims payment in the history of the Association and a significant increase in reinsurance premiums. Because of this, for policy year 2022 we had to apply a 10% general increase, for coastal vessel insurance. This was the first increase in premiums for coastal vessel insurance for 11 years. Since the insurance balance was still in deficit, we had no choice but to increase total premiums by 15% overall for the policy year 2023. We are fully aware that this was a heavy burden for all of our Members.
Despite this tough business environment, most of our Members have renewed their contracts with the Association, and we are deeply grateful for their renewal. While we have lost some contracts, we have welcomed new Members in both coastal and ocean-going vessels insurance. As a result, the Association has started the policy year 2023 (which began on 20 February 2023) with 1,988 vessels/87.8 million tons of ocean-going vessels and 1,726 vessels/2.6 million tons of coastal vessels.
We shall keep improving the management efficiency and stabilising the financial base to keep providing high quality insurance services to our Members.
Once again, we would like to thank all of our Members for their continued support.
Japan P&I Club