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London P&I Club Completes the Year in Strong Financial Position

The London P&I Club maintained its reputation for financial strength and stability in its 2006/2007 financial year, which it closed in a very healthy position. Free reserves were up slightly to $111m, while the Club achieved an investment return of more than eleven per cent.

The Club closed the year with total entered, owned tonnage of approximately 36m gt. In addition, more than 5.5m gt of newbuildings were entered for FD&D construction cover.

The fleet age profile of the Club continues to improve, with 48 per cent of current vessels less than ten years old. The Club also has the largest average ship size -- 38,600 gt -- in the International Group.

Bilbrough Chief Executive, Paul Hinton, says, “The Club is committed to maintaining its financial strength and stability. And it is very encouraging to be able to report further, tangible evidence of the continued success of the measures which have been put in place to achieve that objective, and to enable the Club to consistently maintain deferred calls within budget.

“Any Club, ultimately, is only as good as its members, and the London Club -- which, in recent years, has the lowest members’ debtors in the International Group -- prides itself on the high-quality nature of its international membership. The future will always be uncertain, since that is the nature of P&I. But it is encouraging to face that future in co-operation with loyal and high-quality members.”

Writing in the Club's Annual Report for 2007, Club Chairman John M Lyras refers to the Third EU Maritime Safety Directive which, among other things, attempts to vary internationally agreed conventions on limitation of liability. Noting that the P&I industry shares the EU’s desire to improve safety standards, Mr Lyras says the EU directive “will have the opposite effect to that intended “because it contains ‘direct action against insurer’ provisions that will have the effect of preventing the operating of an element of the mutual system that makes shipowners bear claims themselves, if they have deliberately operated in an unsafe manner.

“Encouragingly, there are elements of the European Parliament who take an active interest in both shipping and its safety and who do understand the damage that the directive will do, if it remains in its existing form. Sadly, however, there are larger elements who remain attracted to the Commission’s original notion that levels of compensation somehow affect behaviour. It is reassuring to know that the International Group Secretariat is working to try and persuade the legislators that the proper approach to dealing with safety is to address it directly, in relation to the construction, maintenance and operation of ships.”

About the London Club

The London P&I Club, managed by A Bilbrough & Co, is one of the leading clubs in the International Group of P&I Clubs. It pursues a policy of selective, quality expansion and strategic investment to maintain financial strength. The London Club Report & Accounts can be accessed at: http://www.lsso.com