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Shoreline wins no-claims bonus

A claims-free first year has gained Shoreline Mutual a bonus and a return of premium from its reinsurers.

Jim Mulrenan   |   10 October 1996

A claims-free first year has gained Shoreline Mutual a bonus and a return of premium from its reinsurers.

The mutual, set up to secure certificates of financial responsibility (COFRs) under the US Oil Pollution Act of 1990, had USD 496,730 paid back by reinsurers for its good performance in 1995, and stands to gain another USD 1m if it can complete 1996 with out a claim.

The Bermuda-based mutual so far has issued financial guarantees to secure 1,731 COFRs For 973 shipowners, in respect of 50.3 million gt of shipping, and claims a grow ing market share.

Valles Steamship and Latvian Shipping are among the new signings and join a prestigious membership that includes Evergreen, Sanko, Gotaas-Larsen, Safmarine, Hanjin, Stena, P&O Cruises, First Olsen Tankers and Argonaut.

Club chairman Donald Yearwood of the New York-based shipping company Attransco says Shoreline's policy will continue to be minimizing costs.

The club - which arranges guarantees up to USD 395m, sufficient for the largest ULCCs - offers supplementary call protection to make Shoreline cover near to fixed premium.

Ideas for refining Shoreline's product for the year-end renewal are currently being discussed, but the club's management is unwilling to say whether the claims-free performance might mean lower premiums.

Shoreline Mutual's first annual report, published this week, shows the club had USD 19.6m in premium income through 1995 and ceded all risk to Centre Re, a Bermuda-based subsidiary of the Zurich Insurance Group.

The club's income came from a reinsurance commission of USD 3.4m and the no-claims bonus. Management fees were nearly USD 2.2m and broker commissions another USD 715,000. The surplus for the year was almost USD 340,000.

Simon Scupham, president of Shoreline Mutual Management, says the club "completed a remarkable first year of operation, achieving significant support in the marketplace from shipowners and managers worldwide."