The Shipowners’ Club has always focused on meeting the insurance needs of the owners, operators and managers of “Smaller and Specialist” vessels. 20 years ago the Club provided cover on 12,655 vessels with an average size of 297GT. In the intervening period numbers have increased nearly threefold. The average size of an entered vessel has likewise increased, albeit by a smaller factor, to 672GT.
During the last 20 years the composition of our entered vessels has changed enormously. As the first P&I Club to offer full P&I cover to the owners of Superyachts, we had 37 yachts, but numbers have now grown to over 2,200. Back in 1994 it was only the largest and widest trading yachts that saw the benefit of having the most comprehensive cover available but over time smaller vessels have likewise switched from restricted cover provided by the commercial markets. As a consequence it is only in the Yacht sector where the average size of vessels has reduced.
In other sectors we have seen the average size of entered tankers increase by 90%, dry cargo and offshore vessels by 50% and dumb barges by 269%. Unsurprisingly harbour craft that tend to operate within, or just outside, port limits have not increased in size.
As part of our ongoing monitoring and analysis of business it is important to understand the changes that are taking place in the vessels that our members are operating and the trade that they undertake. Regional trade has generally been a feature of the operation of smaller vessels but inevitably, as smaller vessels have been replaced by larger vessels, they have tended to operate further afield. This has increasingly become the case with specialist vessels, and in particular those operating in the offshore sector. Our largest offshore vessels have regularly been in excess of 10,000GT for many years, likewise the larger dredgers. It is also not uncommon to find dumb barges in excess of 10,000Gt and even our largest yacht is 13,000GT.
It is definitely the case that larger vessels are more likely to generate larger claims. Larger vessels for that reason will pay larger premiums as a consequence, but in our experience, by remaining focused on vessels that engage in regular patterns of trade, it is possible for these larger vessels to contribute positively to the overall results of the Club. We believe that larger vessels, which are well run and operate a well defined regional trading pattern represent as good a risk as some smaller vessels. This is borne out in the underwriting results across the tonnage spectrum where it is certainly not the case that larger vessels generate a worse record. As such we are more than happy to consider regionally trading vessels up to 20,000GT for entry with the Club.
Yet the vast majority of our Members still operate much smaller vessels than that and they remain the strong and much appreciated back bone of the Club. We have certainly learned to manage their claims experience but it does call into question the establishment of so many small vessel P&I facilities. With nearly 160 years in the market we still struggle to get the right underwriting result on smaller vessels and wonder why the new players think they can. Focusing their attention on vessels under 5000GT really isn’t the answer!
Development of tonnage and vessel numbers