Shizuo Takahashi, Director General

Happy new year to you all.

Firstly, I would like to express our deepest gratitude for your support during the preceding year. We would greatly appreciate your continued support this year.

Although the pandemic subsided and there were signs in 2023 of recovery to pre-pandemic social environment, the business environment surrounding the Japanese and global shipping industry became unstable in the second half of the year. This instability was fueled by the impact of global inflation and, rising interest rates particularly in Europe and the United States, the protracted Russia-Ukraine issue, and the exacerbated situation in the Middle East.

Insurance results for the 2023 policy year remain relatively strong in the Japan P&I Club. However, there was one pool claim in ocean-going owner’s entries in the first half of the year, and one claim exceeding JPY 300 million for Naiko Class entries (Japanese coastal vessels) in the second. Continuous vigilance is essential to monitor the ongoing developments of large claims from the preceding business year, as well as those anticipated in the future.

A top priority is being given to strengthen our financial foundation in order to provide stable, insurance services to our Members. Unfortunately, due to the progress of claims from the 2020 and 2021 policy years for ocean-going owners’ entries, insurance results significantly deteriorated. Consequently, in March 2023, we had to levy unbudgeted supplementary calls of 25% for each of the 2020 and 2021 policy years. Thanks to your support, we successfully recovered our reserves to JPY 27.4 billion for the business year 2022. While Standard & Poor's credit rating remained unchanged at ‘BBB (Outlook: Stable)’, the assessment of capital adequacy improved from ‘Strong (A)’ to ‘Very Strong (AA)’, and the financial risk profile assessment has been raised. Once again, we sincerely appreciate your cooperation.

Through these measures, the financial foundation has been improving. However, the balance of insurance income and expenditure is not yet optimal. Because of various factors such as increasing claims amounts due to the preceding year's loss records, continued global inflation, high reinsurance premiums, and geopolitical risks, including the Russia-Ukraine issue, we have decided to apply a general increase of 7.5% for ocean-going owners’ entries and 10% for Naiko Class entries at the renewal for the 2024 policy year. We would greatly appreciate your understanding and cooperation in this as it is a necessary measure to maintain the stable operations of the Japan P&I Club.

In July of last year, we relocated our head office from Nihonbashi to Akasaka. We have also implemented a digital transformation (DX) project with the aim of enhancing productivity and operational efficiency. We keep on exerting ourselves to deliver higher quality services by might and main.

In recent years, epoch-making challenges in the shipping industry research and development involving autonomous ships and the switch from fossil fuels to alternative fuels. Some ships entered with our club have dual fuel propulsion systems, as, along with the other members of the International Group of P&I Clubs (IG), the Japan P&I Club wishes to support its members during the fuel transition process.

We continue to strive to provide the high quality of service and competitive insurance premiums which our Members expect, and to build a stronger management foundation and further enhance our creditworthiness.

Finally, I would like to conclude my new year message by wishing all of you continued business development, safe operation of your vessels, good health, and happiness.