P&I club policy year (February 20 renewal)

On February 20 every year, at noon GMT, the P&I cover of nearly the whole world's ocean-going fleet is renewed. The thirteen clubs of the International Group, shipowners' mutuals in London, Oslo, Stockholm, New York and Tokyo, cover about 90% of the tonnage. The date comes from the history of mutuality: clubs write annual policies, and the policy year has begun on February 20 since the nineteenth century. The season begins in December or January. Each club announces a general increase, a percentage markup on the premium of all its members before their own claims record is examined, which passes on the cost of the pool's reinsurance. Renewal circulars set out expected claims costs, the state of free reserves, that is, the mutual's own funds, investment income, and the contributions to the Group's reinsurance program, which is renegotiated on the same date. Members then negotiate on their own file: deductibles, limits, claims record for the last three years, fleet changes. A shipowner who changes club almost always does so on that date, within the notice period the club's rules provide. The big losses of the moment, a ferry sinking, a container ship fire, are often paid for in the following increases. The policy year does not close at its end: clubs keep the accounts open for three years, for the time of possible supplementary calls.