Published 26 May 2004
Circular No. 4/2004 May 2004
TO THE MEMBERS OF ASSURANCEFORENINGEN GARD -gjensidig-
Review of policy years
At its meeting in St. Petersburg on 31 May 2004, your Committee received reports on all matters of importance for the business activities of the Association and was pleased to note that the financial position of the Association had strengthened further.
To summarise,
as at 20 February 2004 the Association’s contingency reserves, which provide security and stability for the Membership, stood at USD 328 million (USD 242 million last year).
no further supplementary calls are expected for the 2001 and 2002 policy years.
More detailed information will be provided in the Management Report to be issued in July.
When discussing the policy years below, the term “deferred call” is used, although, strictly, this terminology is not correct since the new term only applies to the 2003 policy year and onwards. The term “supplementary call” is now only used for a call exceeding the forecast for the year
CLOSED YEARS
Closed policy years are developing as previously forecast.
OPEN YEARS The 2001 policy year
The forecast deferred call of 25 per cent was levied in May 2002. During the period from 24 to 36 months from inception, claims have progressed favourably and the estimated technical deficit has been reduced. Due to the sound financial position of the Association, no further supplementary call is required. The year will be closed in October 2004.
The release call for the year was set at Nil.
The 2002 policy year
The forecast deferred call of 25 per cent was levied in May 2003. During the period from 12 to 24 months from inception, claims have progressed favourably, and the year is expected to end in surplus. No supplementary calls are expected for this year, and it is anticipated that it can be closed in October 2005.
The release call for the year was set at 5 per cent.
The 2003 policy year
Whilst the claim cost per entered GT is close to the same as for previous years, the net value of reported claims for the policy year 2003 has increased by 22 per cent compared to the previous year, after 12 months from inception, and is over the budget for the year. Although the 2003 policy year is expected to yield a surplus as a result of a substantial investment return, the technical underwriting result shows a deficit, even with the budgeted deferred call being levied. For the purpose of maintaining the Association’s strong financial position, the Committee decided to levy the deferred call of 25 per cent for payment on 3 September 2004. The year can at the earliest be closed in October 2006.
The release call for the year was set at 50 per cent, to be reduced to 25 per cent once the deferred call of 25 per cent has been levied.
The 2004 policy year
The Committee confirmed that the release call for the year should be set at 50 per cent, which is 25 per cent above the deferred call for the year.
SUMMARY
To summarise, the following decisions were taken:
(i) The 2001 policy year: No further supplementary call will be made for this policy year.(ii) The 2002 policy year: No further supplementary call is anticipated for this policy year. (iii) The 2003 policy year: A deferred call of 25 per cent has been ordered for this policy year for payment on 3 September 2004. (iv) Release calls: The 2001 policy year: Nil The 2002 policy year: 5 per cent The 2003 policy year: 50 per cent* The 2004 policy year: 50 per cent
*To be reduced to 25 per cent once the deferred call of 25 per cent has been levied.
If you have any questions, please contact the P&I underwriting department.
Yours faithfully, GARD AS As agent only for Assuranceforeningen Gard -gjensidig-
Claes Isacson Chief Executive Officer
Gard is a member of
