Steamship Mutual is a leading P&I Club which has grown leaps and bounds. This company offers worldwide marine liability insurance coverage. It has announced that it is taking initiative to boost its capital reserves to compensate for the losses caused due to investment. The company’s announcement said that the absence of a prolonged recovery in the global financial markets had a significant impact on the investment results of the club despite Steamship Mutual's market leading underwriting results. So the Steamship Board has decided to raise additional amount of capital by levying additional premium amount (Class 1 Protection and Indemnity) for these policy years: 2006, 2007 and 2008 which is payable over the next 18 months. The set percentage of extra premium money to be drawn in each of the three years is given below:
Year 2006 - 12.5 percent additional
Year 2007 - 14 percent additional
Year 2008 - 20 percent additional
The Club Chairman named Otto Fritzner said that company is not insensitive to its worldwide customer and can well understand the unpleasant nature of this announcement, particularly in view of the ongoing economic recession looming over every country and all the difficulties generated thereby in the freight market. But company’s primary obligations to its members happens to show them that it secures its top class security position for members' claims and meets the capital requirements of the Club's regulators. Keeping that in mind management feels that it is essential to place the Club in a position to raise additional capital of US$80 million.
Steamship's CEO Mr. James Stockdale has said that unfortunately the unprecedented and unavoidable global economic crisis and the financial markets volatility have taken a severe toll on the business of the Club and its overall financial equilibrium has also been badly affected. Club has faced significant investment losses that amount to about US$95 million. So, this action was really essential to restore and empower Club's reserves and safeguard the Club's security. The additional capital thus collected is designed to restore the reserves to the required level in order to maintain and spread the business more and more and to ensure that the club is in top class position once again to meet all known regulatory requirements.