Since I last addressed you, we have been through a long and cold winter, a hectic and satisfying renewal season and a claims period worthy of the old Chinese curse: "May you live in interesting times". Let me take the last point first.
Towards the end of the year, two high-profile car carrier accidents happened in rapid succession: the HUAL EUROPE grounded off Oshima Island in Japan in a powerful typhoon and became a total loss. In the English Channel, the TRICOLOR collided with another vessel and sank in fairly shallow waters - only to be further damaged by other ships running into her where she lay in a capsized position in the fairway. Again, a total loss. Fortunately no lives have been lost, but the financial impact of the two casualties will naturally be felt. At the time of writing, contracts for the removal of both wrecks have been entered into - in Japan, we expect the removal to be very difficult and take up to two years. In the Channel, we hope to be finished with the job, weather permitting, sometime towards the end of this summer. And, as can be imagined, the cases will be expensive and involve our reinsurance underwriters to varying degrees. Such serious cases are extremely labour-intensive and have kept us busy for long periods. Still, we are happy to have got the work in motion in the light of the potential environmental consequences involved - and the obligation of our clients as well as ourselves to take part in the process of putting things right. On the financial side, we are well prepared to take care of incidents of this magnitude - the size of the Club reserves is pre-determined with precisely such scenarios in mind - and signals from our accounts department on the results of the year just behind us certainly give no cause for worry - on the contrary!
Following a period of planning and implementation I am very happy to see that our office in Helsinki is now in place and fully operational together with the whole of the Sampo marine portfolio. Seventeen colleagues are integrated in the Gard Services network and can offer their competence to clients in all business areas. The Gothenburg office with its 11 employees has already been "on stream" for a while and is functioning well. We wish them all a hearty welcome - the effect of fully crewed offices in Finland and Sweden strengthens our position as a major force in Scandinavian Marine and Energy insurance - and world-wide as well. In New York, our friends in Trimar have moved offices to 30 Broad Street - and our 13 colleagues there now have on-line access to all Gard Services facilities. Such facilities include a recently implemented CRM-program intended to look after our customer relations management and "The Pilot" - our version of a so-called balanced scorecard strategy program.
The synergy effect continues to gain momentum.
| ||In Marine and Energy results are according to plan. While we are on the right track, even tighter measures have been put in place in order to reach our targets sooner with an even more stringent underwriting approach in Marine and a return to upstream core business in Energy.|
The run-up to the 20th February P&I renewal was exciting as usual. Client visits and marketing have been going on for months and it all climaxed at exactly 1200 hours Greenwich Mean Time on 20th February.
Around 4.5 million GT joined us for P&I insurance, either as additions to existing entries or as completely new members. Slightly less than 1.5 million GT left us for various reasons. We are thus left with a net gain for owners' entries of some 3 million GT. In addition, a considerable amount of tonnage entered for time charterers' risks was added. All told, we should now clock in at around 112 million GT - and with the rating recently granted to us by Standard & Poor we believe we can offer both old and new P&I members what they expect - financial stability and predictability.
It is also rewarding to note that the "synergy effect" - clients in Hull and Machinery, P&I and Energy choosing Gard Services for their combined requirements - continues to gain momentum. The process we have been through since the summer of 2000 has given added strength to all three business areas. We are firmly established with efficient and operational service centres in all our main client locations and have an excellent system for following up all others.
On the threshold of a hopefully long, warm and delightful Scandinavian summer - including our annual "happening" in Arendal on 5th and 6th June, also known as the Summer Seminar - it is time to wish you all happy sailing!