Club Management

If a vessel is sold it is customary for the Club to offer the owner a once-off “release call” relating to that ship so that he can tidy up his books without the risk of supplementary calls being made many years after the ship has been disposed of.  Almost all P & I policy years start on 20th February, a curiosity which dates from the time that ice was supposed to have melted to allow trading into the Baltic Sea to recommence. There is competition between the P & I clubs for membership, the larger the club the greater the economies of scale in management and the bargaining position for re-insurance. This has led to periods when some Clubs cut their rates in order to attract more business.  Under the mutual system this practice is only of short term benefit to shipowners as the other mutual members will be obliged to make up any uncovered losses through Supplementary Calls for unclosed years.  Clubs which are members of the IGA have developed a system to discourage a member from switching Clubs in order to get an apparently better deal or to eliminate bad claims from his own fleet (sometimes called “record dumping”).  It must always be remembered that under the mutual system each member is in effect both an underwriter and an assured at the same time. Because, under the mutual system, the scope for price competition is necessarily restricted, Clubs do compete effectively in the quality of service offered to their members.  Many Clubs are either managed directly or through managing agents in London, while Northern England, Scandinavia, New York and the Far East are also major centres.  All Clubs have accredited correspondents at ports throughout the world staffed by experts who know their own areas and can provide back-up practical and legal advice whenever a vessel is in trouble.