Skuld Renewal Update 2 policy year 2023/24

CIRCULAR TO ALL MEMBERS

INTERNATIONAL GROUP REINSURANCE PROGRAMME

In this circular to members, we will outline the International Group’s Reinsurance Programme for the Policy Year 2023/24.

KEY FEATURES

• Club retention maintained at USD 10 million
• Pool maintained at USD 100 million.
• International Group’s captive, Hydra, utilised as part of the risk retention strategy
• Main General Excess of Loss have been renewed with unamended free and unlimited coverage for all risks except Malicious Cyber, Covid and Pandemic
• Malicious Cyber, Covid and Pandemic risks have expanded benefit of free and unlimited cover for claims up to USD 650 million excess of USD 100 million, covering almost all Group Clubs’ certificated risks. Excess of USD 750 million there is up to USD 1.35 billion of annual aggregated cover in respect of these three risks.
• Group agreed to accept an increase in rates for shipowners following worsening claims record and hardening market conditions

INTERNATIONAL GROUP REINSURANCE ARRANGEMENTS FOR POLICY YEAR 2023/24

The structure of the cover reinsured through International Group and the Pool is set up as follows:

Club retention:  USD 10 million
Pool retention:  USD 100 million (USD 90 million excess of USD 10 million) (Part of the Pool is covered by Hydra excess USD 30 million)
General Excess cover:  USD 2 billion in excess of USD 100 million
Overspill protection:  USD 1 billion in excess of USD 2.1 billion

LIMITS ON THE ASSOCIATION’S COVER 2023/24

Oil Pollution:  USD 1 billion
Passenger and crew combined:  USD 3 billion
Passenger (sub-limit):  USD 2 billion

The oil pollution limit is applicable to the aggregate of owners’ and bareboat charterers’ liabilities. (Skuld Rules Appendix 5)

For passenger and crew claims, the overall limit is USD 3 billion any one event, any one vessel and with a sub-limit of USD 2 billion in respect of passenger claims alone. (Skuld Rules Appendix 5A)

OVERSPILL PROTECTION

In the event of a claim in excess of the cover limit of the International Group Excess Loss Contract of USD 2.1 billion, members will be liable to contribute overspill calls which will remain subject to a limit of 2.5% of the property limitation fund for each entered vessel calculated in accordance with the 1976 Limitation Convention (Skuld Rules Appendix 3). Overspill protection has been placed for claims up to USD 1 billion in excess of USD 2.1 billion. The limit on each mutual member’s liability for claims other than oil pollution and for claims involving passengers will remain unchanged at 2.5% of the Convention Limit, which provides an overall limit of approximately USD 8 billion.

MARITIME LABOUR CONVENTION

The market reinsurance cover will be renewed for a further 12 months from 20 February 2023 at competitive market terms with the premium included within the overall reinsurance cost.

INTERNATIONAL GROUP GENERAL EXCESS OF LOSS REINSURANCE CONTRACT 2023/24

The International Group RI rates (USD per GT) including Hydra premium, Collective Overspill Cover and excess war risks P&I for the year commencing 20 February 2023 are renewed as expiry and are as follows:

Further background on the changes in rates may be found at International Group of P&I clubs’ website: www.igpandi.org under “News and Information”.

Members having policies in other currencies than USD will have rates that are affected by the change of exchange rates between USD and the currency of the Policy. Skuld has to pay the reinsurance in USD thereby this will have an impact on the reinsurance rates in other currencies: (2023/24 rates per GT and change in % from 2022/23)

US OIL POLLUTION SURCHARGE

The surcharge for 2023/24 will remain nil.

WAR RISKS P&I

The Association’s special War Risk P&I cover in excess of Hull and Machinery War Risk P&I cover will continue. The limit of this cover remains at USD 500 million each vessel any one event. The minimum attachment point of the cover (where the vessel is not protected by Primary War P&I up to proper hull value) remain at USD 500 million.  However, this excess War Risk P&I cover excludes any liabilities which members may incur under TOPIA 2006. Due to the ongoing active war between Russia and Ukraine, the IG’s Excess War reinsurers require Territorial Exclusion language (consistent with exclusion already applied by reinsurers for Primary War P&I coverage) for vessels trading in these waters. The IG are negotiating availability of sub-limited cover for affected vessels, which remains an ongoing process.  Details of the cover will be set out in the Association’s circular on P&I War Risk cover later in January 2023.

TRIA / TRIP

TRIA has been further extended by the Terrorism Risk Insurance Program Reauthorisation Act of 2015 up to 31 December 2027. Cover for acts of terrorism as defined in the US Terrorism Risk Insurance Program Reauthorisation Act will be included on the same terms with the same limit. A premium of USD 0.0025 per GT will be deemed attributable to these risks and will be included within the overall premium.

SKULD CALL HISTORY

Yours faithfully,
Assuranceforeningen Skuld (Gjensidig)

Ståle Hansen
President and CEO

See also Renewal update 2, attached in pdf.