Hellenic reserves rise despite premium reductions

The Hellenic War Risks Association increased its reserves to $47 million by December 31st 2007 following an investment return of 6.22 per cent and a $2.8 million surplus on the year.

The Hellenic directors' reviewed the Association's 2007 financials at their May meeting. Increasing ship numbers and rising values kept income at 90 percent of the 2006 volume, even though there was a 28 per cent reduction in premiums at renewal.

The total value of ships entered with the Association----generally known as the Hellenic War Risks Club----was $91.4 billion at December 31st. It has continued growing since. In mid-May, the $100 billion mark was passed for the first time in the Hellenic's 48-year history.

The number of entered ships rose by 10 per cent during 2007 to 2,228. Tonnage has increased from 59 million in May 2006 to 67 million 12 months ago and 75 million now. Around 70 per cent of all Greek owned ships have war risks cover with the Hellenic.

John Culley of Hellenic managers Thomas Miller explained: "Volatility is a feature of the war risks market. Increasing membership and growing reserves mean the Club can respond more flexibly to members' needs as the market changes."

The directors also decided not to impose on its members the changes to the Additional Premium areas recommended by the Joint War Committee on May 2nd who added Gulf of Aden transits and extended the Somalia area.

The Hellenic feels that circumstances have not changed enough in recent months to insist on these additions but appreciates the need to be watchful. The Club will retain any increased exposure which will be appropriately reinsured at no additional cost to members. All members must continue to give notice re Yemen and Somalia port calls, Yemen transits up to 50 nautical miles from the Socotra Archipelago and Somalia transits up to 50 miles from the Gulf of Aden and 200 miles in the Indian Ocean.

Mr Culley said there had been a limited number of claims so far this year. "As a mutual, the Hellenic has to consider the effect any changes would have on our members. We are obviously keeping a keen eye on developments in the Gulf of Aden but for now 'no change' is the message."

-ends-