The Association made significant progress in underwriting during the 2006 policy year, achieving a major increase in tonnage entered with the Association. In the 2006 policy year, 232 ships totaling 3.46 million GT were newly entered in the Association, being the largest increase in the history of the Association. Although 173 ships, accounting for 1.88 million GT withdrew from the Association in the same policy year, these withdrawals were all due to sales of vessels, payment in arrears, and withdrawal of class. The only exceptions to this being 5 ships with a high loss ratio where the owners declined to pay the increased premium.
As at February 20th 2007, the Association has 120 Members with 892 entered ships amounting to 14.46 million GT. The total entered tonnage increased 1.58 million GT, representing an increase of 12.26% in comparison with last policy year.
The following Members made significant contributions to the increase in the entered tonnage: China Shipping Development Co. Ltd Tramp Co., Cosco Container Lines Co. Ltd., China Shipping Container Lines Co. Ltd., Dalian Ocean Shipping Co. Zhejiang Ocean Shipping Co. Ltd., Pacific King Shipping Holding Pte. Ltd., Hongyuan Marine Co. Ltd, HTM Shipping Co. Ltd.
Thanks to a boom in the shipping market, credit control improved dramatically. In the 2006 policy year, the collection rate for calls and prepaid premium received was 99.27%.
As at February 20th 2006, the unpaid sums due from the Member to the Association was USD1.77 million, a decrease of 7.3% compared with that of the last policy year. The ratio of the unpaid Calls to the total funds of the Association reduced from last policy year¨s 1.15% to 0.81%, reduced by 0.34%, representing a decrease of 29.5%.
Substantial progress was made by the Managers in collecting calls and premiums in the 2006policy year. All members who are in the Board pay their premium on time, which sets a good example to other Members. The Association has declined to offer renewal terms to Members with poor credit history or long outstanding premiums. The ratio of calls collection is now on a par with that of the International Group. In part, the high calls collection ratio has been helped by increased of earnings, standardization of management, improved awareness of insurance by Members and the buoyancy of the shipping market.
The club¨s Managers will continue their efforts in the prompt collection of calls and premium in order to bring the Collection Ratio of the Association in line with that of the International Group Clubs. In the meantime, we would like to ask Members for their support in making prompt payment of premiums.
3.International Co-insurance
Due to an increase of major claims, all of the International Group clubs with which the Association has had co-insurance programme set their general increase for the 2006 policy year at a minimum level of 12.5%, with the exception of two at 5%. The Association was under pressure to accept a high increase in the co- insurance premium. However, despite the disadvantageous circumstances, the Association was able to conclude a renewal arrangement with each Club with an average increase of 11.1% per GT. Due to the efforts of the Association, the co-insurance costs were controlled at a reasonable level.