Published 01 October 2009
Introduction
This document highlights the decisions taken at the recent meeting of the Board of Directors of Assuranceforeningen Gard -gjensidig- (the “Association”).
Review of policy years
Closed years
Closed years up to and including the 2006 policy year have progressed as projected.
2006 policy year closed
A 20 per cent deferred call, 5 per cent less than forecast, was levied in September 2007. The Board has now decided to close the 2006 policy year without any further calls being levied.
Open policy years
The 2007 policy year
The budgeted 25 per cent deferred call was levied in September 2008. The year is assumed to produce a surplus and is likely to be closed in October 2010 without any supplementary calls being levied.
The 2008 policy year
The budgeted 25 per cent deferred call was levied in September 2009. The year is expected to produce a deficit as a result of losses on the investment portfolio. However, due to the Association’s overall strong financial position the year is likely to be closed in October 2011 without any supplementary calls being levied.
The 2009 policy year
During the first six months of the year the Association has experienced a decrease in the frequency of claims. The value of reported claims is below the budget for the year as at 20
August. Members should continue to budget with the full deferred call of 25 per cent being levied for the 2009 policy year.
Release calls
The Board resolved that the release calls for open policy years be set as follows:
For the 2007 policy year: nil
For the 2008 policy year: 10 per cent
For the 2009 policy year: 50 per cent
For the 2010 policy year: 50 per cent
Premium policy for the 2010 policy year
As for the current year, the premium policy for the 2010 policy year for ordinary P&I business will be a technical result target expressed as a combined ratio net (“CRN”). The CRN expresses the estimated claims and administration costs for the year over estimated premiums earned.
The claims development for previous policy years is positive. In recent months the Club has seen a normalization of the level of claims both in frequency and severity. However, looking forward a claims increase is expected. Against this background the Board decided that no general premium increase is required for mutual and fixed premium P&I entries to meet the target of a CRN of 102.5 per cent for Gard P&I for the 2010 policy year.
The level of premium for both mutual and fixed premium P&I entries will depend on the individual Member’s exposure and loss record.
The FD&D portfolio has during the last years had a negative development. The Board determined a general premium increase of 20 per cent both mutual and fixed FD&D entries.
The deferred call for all mutual entries was set at 25 per cent of the advance call.
In addition, separate adjustments will be made in each Member’s premium rating to reflect changes in the cost of the International Group’s reinsurance arrangements for the 2010 policy year. Further details about the International Group and the Association’s reinsurances for the 2010 policy year will be published later.
Deductibles for P&I risks below standard terms will be increased by USD 1000. The standard minimum deductible for FD&D risks will increased to USD 5000.
Half year status report as at 20 August 2009
Tonnage (P&I mutual)
Total tonnage entered on behalf of owners on a mutual basis as at 20 August 2009 amounted to 117 million GT. Comparable figures as at 20 February 2009 were 114 million GT.
Key figures from the consolidated accounts1
The total balance available to meet outstanding and unreported claims amounted to USD 2,021 million of which the general contingency reserve totaled USD 627 million. Comparable figures as at 20 February 2009 were USD 1,667 million and USD 430 million, respectively.
The technical account showed a surplus of USD 27 million resulting in a CRN of 92 per cent which is an improvement compared to last year and better than budget. The non-technical account showed a surplus of USD 169 million resulting in an overall surplus for the six months period to 20 August 2009 of USD 197 million.
If you have any questions, please contact Senior Vice Presidents Rolf Thore Roppestad or Bjørnar Andresen.
Yours faithfully,
GARD AS As agent only for Assuranceforeningen Gard – gjensidig -
Claes Isacson Chief Executive Officer
1 For this purpose the term “consolidated” means the combined consolidated accounts for Assuranceforeningen Gard – gjensidig, Gard P. & I. (Bermuda) Ltd and Gard Marine & Energy Limited. The Boards of Directors of each of these three companies have permitted the combined consolidated accounts figures to be published.
Gard is a member of
