Hellenic Maintains Annual Rates and Extends Piracy Cover

The Hellenic War Risks Club has decided to keep general premium rates for 2010 the same as those for the present year, extend the areas requiring Additional Premiums and offer extra cover in relation to piracy.

The Directors reached their decisions at a meeting in Paris on 30th November.

The gross annual rate for Hellenic war risks cover will remain at 0.01205 per cent of the entered fleet value. All members will receive at least 20 percent commission on the gross rate. The Club will continue to operate a sliding scale of additional commissions, ranging from a further five percent for fleets valued at up to $100 million (25 percent in total) to an extra 30 percent for fleets with over $1 billion entered value (50 percent in total).

• Additional Premium areas

Since February 2009, the Hellenic Club’s Additional Premium area has extended 600 miles from the east coast of Somalia. However, attacks have been taking place further and further from the coast. One entered ship was attacked more than 1,000 nautical miles away and two more than 700 miles into the Indian Ocean. Seven entered vessels have been seized so far this year.

As a result, the Club’s AP Area is being increased from 1st January 2010. In the Indian Ocean, this will extend to longitude 65°E south of latitude 15°N, with the southern boundary running along 11°S and 12°S.

• Piracy loss of hire

The Club will continue to offer optional insurance for hire lost as a result of war risk damage. From 1st January 2010, it will go further by offering members the option of extended loss of hire insurance that covers hire lost if a ship is seized by pirates, even if the ship has not been damaged.

This new loss of hire insurance will be priced at 0.01205 percent of the sum insured for annual cover. Generally, cover of up to 90 days’ hire will be available.

Members paying an annual premium for the new insurance will also be able to take out “piracy loss of hire” insurance for incidents in Additional Premium areas, including the Gulf of Aden and the Indian Ocean. This cover, which will only be available to members taking “piracy loss of hire” on an annual basis, will cost two and a half times the Club’s prevailing AP rate for the areas in question.

It is being offered in response to numerous enquiries from Members concerned about the commercial risks of sailing through the Gulf of Aden, the Indian Ocean and other areas. With around 1,500 entered ships expected to transit the area this year, the Club offers advantages of scale, allowing Members to buy cover competitively.

At 31st December 2008, the Club’s reserves stood at $47 million, allowing it to offer these competitive annual rates despite higher claims, including those arising from Somali pirate incidents. The Club’s reserves and a positive 2009 year to date mean that it can, if necessary, retain risk without having to increase annual rates to Members. Membership now stands at about 2,300 ships, which represents a marginal increase on a year ago. Total entered value is around $88 billion. The Hellenic Club insures about 70 percent of the Greek-controlled fleet for war risks.

Mr. John Culley of Hellenic Club Managers Thomas Miller commented: "There have been claims during 2009, mainly in the Gulf of Aden and the Indian Ocean. The Club’s income has, however, increased because of higher AP income so we still expect a surplus for 2009. As a result, we will be able to maintain the Club’s sound financial base and continue offering members the advantages of mutual cover at very competitive rates."

“Piracy is a growing concern for our members so we have made piracy loss of hire cover available as an optional additional insurance. Recent incidents far from the Somali coast highlight the need for defences against piracy to be implemented and maintained for ships within the limits of the voluntary reporting schemes operated by the UK MTO Dubai and MARLO Bahrain.”

• Additional Notes:

The Hellenic War Risks Club circular C7/2009 to members and a map on the Club website provide details of the extended Additional Premium areas. Members are referred to the “Best Management Practices to Deter Piracy” document for advice on avoiding, deterring and delaying piracy attacks. There are sections on typical attack profiles and lessons learnt; pre-transit and voyage planning; defensive measures; in-transit operations; and steps to take if attacked.