Eastern Mediterranean Maritime is quitting Gard in the first significant upset of the protection-and-indemnity (P&I) renewal season.
The Thanassis Martinos-controlled shipping company is to pull tankers of up to VLCC size, bulkers up to supramaxes and a containership out of the Norwegian P&I club at the renewal.
Eastern Med is preparing to renew the vessels with the UK and Standard clubs with the former expected to pick up most of the tonnage leaving Gard.
Gard is seeking a 5% general increase at the renewal while both the UK and Standard want 7.5%.
It is relatively unusual for fleets to quit Gard, the biggest and wealthiest of the P&I mutuals, as it has a long-term history of seeking relatively modest general increases.
And Gard has not only avoided the cash calls of some rivals but returned premium to members over three recent years.
But TradeWinds understands Eastern Med is intent on consolidating its P&I in two clubs as bigger entries will potentially bring more negotiating leverage.
Under the rules of the International Group P&I cartel, the UK and Standard clubs are not allowed to undercut the Gard renewal quotation on the 10 ships that are moving. But the UK and Standard clubs are free to set their own rate on ships they already insure that are renewing.
Athens-based Eastern Med also has a series of containership and chemical-tanker newbuildings on order from yards in China and South Korea for delivery this year and next.
Newbuildings also provide good opportunities for negotiating improved terms.
About 40% of the Eastern Med fleet currently has P&I cover from the Standard Club with Gard and the UK Club sharing the balance.
Post the 20 February renewal, the split is expected to be 50:50 between the Standard and UK clubs.
The Martinos brothers are notable long-term supporters of the Standard Club with Andreas Martinos of Minerva Marine a shipowner director of the mutual, although his fleet also has ships in the North of England Club.
Thenamaris Ships Management run by Dinos Martinos has its entire fleet in the Standard Club.
Eastern Med uses Arthur J Gallagher to place its P&I cover but the broker refused to comment on their client’s plans.
Elsewhere, the renewal is going slowly as owners and brokers seek a way to mitigate the double whammy of relatively high general increases with a huge rise in reinsurance costs on top.
CORRECTION FROM LAST WEEK
Steamship Mutual — A couple of words missing from a report in last week’s edition of TradeWinds may have given an incorrect impression of the risk of the club making an unforecast call.
The report about Standard & Poor’s affirming Steamship Mutual’s rating as “A-” with a stable outlook should have said the rating agency suggests cash calls are unlikely as the club regards them as a measure of last resort.
