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Sweden Swedish Club: Stability In Stormy Markets While the impact of poor freight rates and low oil prices have been felt in all quarters of the Scandinavian maritime industries, the region's hull underwriters and P&I Clubs continue to benefit from the relatively strong domestic shipping and energy sectors. Scandinavian marine insurers have demonstrated resilience in challenging market condi- tions. The global hull market remains in a downswing of unusual severity. As for the P&I sector, the past 12 months have had a nervous character, with talk of mergers and the increasing profile of the fixed premium players. The Swedish Club, the Gothenburg- headquartered marine mutual, is com- mitted to both sectors — providing total package hull and P&I services. In the hull sector, the Club has refused to fol- low the market in its downward spiral. SaabTankRadar is control That's the Difference www.saab.tankradar.com Circle 296 on Reader Service Card Safer Communication at Sea Interactive GMDSS and Maritime English training on CD-Rom • Flexible training on board or ashore • Efficient as well as entertaining learning method * * * • For preparatory use or to maintain acquired skills * * . New version of "Maritime Communications"now Maritime LaUCation available P.O. Box 24135, SE-104 51 Stockholm, Sweden, Phone: +46 8-671 09 60, Fax: +46 8-783 04 00, E-Mail: info@maritime.se Circle 273 on Reader Service Card Director of underwriting & marketing Claes Lindh says: "Many players have poured vast sums into their attempts to defend market share. It would be unthinkable, however, for a marine mutual such as The Swedish Club to use members' funds to 'buy' new business by offering heavily discounted rates." He adds: "Our primary aim in this dif- ficult market is to defend the paramount principle of sound underwriting: premi- ums must cover claims." The Swedish Club expects a major shakeout to develop in the global hull market, as conditions begin to harden. Many parties now locked into multi-year deals at cut-throat rates are bound to suf- fer. Few, if any, will escape heavy loss- es. At the mid-year point, Members' Agent Sedgwick Oakwood forecast breakeven for Lloyd's in 1997 and a loss of $198 million for 1998. In the marine sector, they predict a 2.51 percent loss, as against a 1.66 percent return for 1997. In this stormy environment, The Swedish Club focuses on providing cer- tainty. The hull portfolio now consists of 649 vessels, of around 20 million-gt, with the Club writing around 12 million- gt. Despite the market's freefall during the past two years, the Club's average order remains at around 52 percent. This reflects consistent performance within a framework founded on long-term rela- tionships with members and reinsurers. In the P&I sector, The Swedish Club portfolio continues to expand. In the year to the last renewals date (February 20), the P&I-entered fleet increased by 12 percent in terms of vessel numbers and by 25 percent in tonnage. On this issue of merger, The Swedish Club made it clear two years ago that it had no interest in this option for future develop- ment. This policy was reaffirmed at the Club's annual meeting in Gothenburg in June of this year. The possibility of mergers elsewhere within the P&I com- Celsius To Create Substantial Submarine Builder Swedish defense group Celsius announced it is merging unit Kockums Naval Systems with Germany's Howaldtswerke-Deutsche Werft (HDW) to create a leading global player in sub- marines as the defense sector consolidates. Celsius reportedly signed a contract with Babcock Borsig and HDW parent company Preussag, Germany's tourism and industri- al group, to form a European shipbuilding company. HDW's new ownership structure, to be reviewed after 2000, will comprise of Babcock Borsig with 50 percent plus one share, Celsius with 25 percent plus one share and Preussag with 25 percent minus two shares. Celsius said an agreement had been reached between Celsius and HDW settling the acquisition of Celsius's 49 percent stake in Australian submarine builder, Aus- tralian Submarine Corp.
