US Coast Guard figures show that COFR (Certificate of Financial Responsibility) guarantor Shoreline Mutual is leading the commercial market, its Bermuda-based management company said this week.

President of Shoreline Mutual Management (Bermuda) Ltd. Simon Scupham said that while two new COFR companies had become operational this year, Shoreline had lost no ground.

He said, "The market is certainly different with the advent of two new COFR facilities becoming operational this year. This has created more competition which is obviously good for ship owners. In any event, Shoreline had been anticipating a significant drop in premiums for its 1997 COFR guaranties as a Shoreline leads the fleet From Page 33 that we had experienced and no claims bonus accumulated in the mutual. "We are extremely pleased with how Shoreline has performed in the first month of the new market place according to the United States Coast Guard (USCG) statistics recently released.

"As of January 28, 1997, of the commercial facilities providing COFR guaranties, Shoreline leads the way with 1,954 guaranties, with the two new programmes having issued less than 500 guaranties between them.

"Shoreline accounts for 39.2 percent of the commercial guaranty market, which is the same percentage prior to the entry of the two new facilities.'' In a circular to members and brokers, Mr. Scupham said a breakdown of the figures show Shoreline leading the commercial tanker market with 549 guaranties accounting for 45.6 percent of the market.

He said that Shoreline's share of the commercial dry segment has not changed since the last quarter of 1996, with 1,337 guaranties, accounting for 37.1 percent of the market.

Mr. Scupham said, "The figures certainly show that Shoreline's membership has remained loyal while a majority of ship owners previously entered with the old First Line facility still have COFRs in effect with them and consequently have not yet decided on an alternative vehicle.'' The only original player in the COFR guaranty market, Shoreline has advocated since their start-up in December 1994 that the only structure that made sense in the COFR business was one which was owned by ship owners and was to their benefit, as opposed to third parties.

Mr. Scupham said Shoreline's independence from P&I Clubs and low cost to ship owners are two reasons for the company's success.

He said, "The fact that it is a facility independent from P&I Clubs and brokers has been a major strength and with 56 million gross tonnes entered, Shoreline is in its own right a substantial club.

"I believe we have established somewhat of a utopia in terms of club structures. We are now a fixed cost mutual.'' Shoreline eliminated the minimal exposure to supplementary calls at the beginning of the year, although retaining important elements of a mutual.

The restructured programme provided an improved contingent guarantor's liability reinsurance arrangement, together with the no claims bonus that accumulated within the existing reinsurance programme to date, which eliminated any exposure to supplementary calls.

The programme is still supported by Centre Re, Lloyd's of London, London insurance companies and the international market.