Circular no. 5/2004


October 2004


Composition of the Committees
Review of policy years

Premium rating for the 2005 policy year

Gard P&I half year status report as at 20th August 2004


To the Members of

Assuranceforeningen Gard gjensidig-

Dear Sirs

Introduction
This document highlights the decisions taken at the meeting of the Committee of Assuranceforeningen Gard -gjensidig- (the Association) held in Barcelona on 23 and 25 October 2004. As to the developments of closed and open policy years a fuller report will be found on our website www.gard.no.

Composition of the Committees

The Committee

At the Association's Annual General Meeting, which took place on 20 August 2004 in Arendal, the following new members were elected to the Committee:

Nicolar Frangistas, Franco Compania Naviera, Piraeus
Sjur Galtung, Wilh. Wilhelmsen ASA, Oslo
Morten Hegh, Leif Hegh & Co., AS, Oslo
Jan Lissow, Interorient Navigation Co. Ltd, Cyprus
Oscar Spieler, Frontline Management AS, Oslo
Hans Ivar Vigen, The JJ Ugland Companies, Grimstad


At the meeting held in Barcelona on 23 and 25 October 2004 the Committee elected Stephen Pan of World-Wide Shipping Agency Limited, Hong Kong , as its Chairman and Ricardo Claro Valdes of Compania Sud Americana de Vapores S.A. (CSAV), as its Vice Chairman.

The Executive Committee

The Annual General Meeting held on 20 August 2004 elected

Trond Eilertsen, Oslo

as a new member of the Association's Executive Committee.

At the meeting held on 30 September 2004, the Executive Committee re-elected John Hatleskog of Havinvest A/S, Oslo , as its Chairman. Bengt Hermelin of Saudi Maritime Holding Co., London was elected as the new Vice Chairman of the Executive Committee.

Review of policy years


 

Closed years

Closed years up to and including the 2000 policy year progress as projected.

2001 policy year closed

The Committee decided to close the 2001 policy year without ordering a further Supplementary Call.

Open policy years

The 2002 and 2003 policy years are likely to be closed in October 2005 and 2006 respectively without Supplementary Calls being levied.

The 2004 policy year - the first six months of the year have seen an increase in reported claims compared with previous years both in volume and in number. The increase must be seen against the increase in tonnage, the number of ships entered and a shift in the composition of the entered tonnage.

Members should continue to budget with the full Deferred Call of 25 per cent being levied.


 

Release Calls

The Committee resolved that the Release Calls for open policy years be set as follows:

For the 2002 policy year: nil
For the 2003 policy year: 10 per cent

For the 2004 policy year: 50 per cent
For the 2005 policy year: 50 per cent


 

Premium policy for the 2005 policy year

Mutual entries

In light of the Association's financial strength, the Committee decided that the general increase for 2005 should be set no higher than necessary.  Accordingly, the Committee resolved that there be a 5 per cent general increase in the Advance Calls for both P&I and FD&D in respect of mutual entries and in the fixed premiums for FD&D entries for Charterers. The Deferred Call for mutual entries is set at 25 per cent of the Advance Call.


 

In addition, separate adjustment will be made in each Member's premium rating to reflect any changes in the cost of the International Group's reinsurance arrangements for the 2005 policy year. As is customary, in addition to the general increase, Member's premium rating will be reviewed in the light of their individual loss records and other relevant factors.  Further details about the International Group and the Association's reinsurances for the 2005 policy year will be published later.


 

Fixed premium entries

The level of premium for these fixed premium products will depend on the individual Member's loss record and market conditions, including the requirements of the Association's reinsurers.

Individual premium rating

Each Member's premium will, as usual, be assessed individually in the light of his loss record and the cost of reinsurance. All Members will receive shortly the loss record for their respective fleets. 

Members who have not heard from the Association by 20 January 2005 may assume that there will be no changes in the premium rating for next year, save for adjustments based on the general increase and variations in the reinsurance costs.

Gard P&I - half year status report as at 20 august 2004

Tonnage

Total tonnage entered as at 20 August 2004 was 122 million GT of which Owners' mutual entries represented 72.5 million GT. Comparable figures as at 20 February 2004 were 118 million GT and 69 million GT respectively.

Balance available for outstanding and unreported claims - general contingency reserve

As at 20 August 2004 the balance available to meet outstanding and unreported claims amounted to USD 883 million, of which the general contingency reserve represented USD 344 million. Comparable figures as at 20 February 2004 were USD 809 million and USD 328 million respectively. The increase in the contingency reserve is mainly a result of the surplus for the 2003 policy year.

Investment income

The net loss on the non-technical account (investment income) amounts to a deficit of USD 3 million in the six-months period to 20 August 2004.

We urge you to view the full report on www.gard.no. If you have any questions, please contact Senior Vice President Sven-Henrik Svensen.

Yours faithfully

GARD AS

As agent only for Assuranceforeningen Gard -gjensidig-

Claes Isacson

Chief Executive Officer