Rewritten policies will not reduce losses, says hull committee chairman
The new International Hull Clauses (IHC) will be "no panacea" for the dire straits that the hull market is in. That was the stark warning given by Joint Hull Committee (JHC) chairman Simon Beale at the launch of the new hull insurance clauses.
The clauses are intended to modernise the Institute Time Clauses (ITC), which are the basis of current marine policies.
Beale reiterated the need to focus on achieving rate increases if the hull market were to become profitable. He refused to be drawn on whether the new clauses would help to rejuvenate a market that has not made a profit since 1996.
The IHC were launched by the JHC last Thursday at a market briefing in Lloyd's Old Library.
Beale said: "The clauses have been updated to accurately reflect the demands of the shipping industry and the insurance industry.
"They are intended to be more user-friendly, have greater clarity, remove uncertainty and embrace current practice."
The clauses are not a major rewrite of the 1983 and 1995 ITCs. But they do provide wider coverage than the previous clauses and place less emphasis on warranties.
The revision began in spring 2002 and involved consultation with ship-owning associations, overseas insurers, adjusters and brokers.
Beale admitted that the clauses may need to be amended. He said: "The JHC accepts that they are not perfect. They will be tested in the market and will be revisited in 2003 and republished next year if necessary."
There will be an initial review in six months followed by an annual review thereafter.
While the old ITC clauses can still be used, Beale said: "I am confident that the [new] clauses will be adopted by much of the market."
And Brit marine underwriter Peter Christmas said: "I hope [they] will form the market into a more of a market again."
Seascope director Tony Flanaghan commented that there needed to be a quantitative assessment of the improvement that the clauses made. "That would be a massive task," he said.