History of The American Club


Official histories imply that the idea of forming an American Club emerged full-grown from the minds of American shipowners during World War I, but interest in forming a Club was undoubtedly percolating in the minds of the people such as Russell Loines who ran Johnson & Higgins' P&I Department in the early 20th century, and who later became the first Secretary of the American Club. Loines spent timein London in 1901-02, living in Notting Hill and commuting to the City. Clubs were being formed then; Skuld in 1897, Gard in 1907, and Steamship Mutual in 1909. Loines wrote to a friend, in 1904, "[s]hipowners have shown a little more animation these last few months, and I hope now that in less than a year the "American Shipowners League" will be a going concern. It promises to be the kind of concern which will ultimately give its promoter some freedom to follow his own devices, which is not to be looked for in legal practice, even in Admiralty." Whatever the American Shipowners League was intended to be, it took a World War to bring the American Club into existence.


In 1914, Europe went to war.

The United States continued to trade with the belligerent nations, although neither Germany nor the United Kingdom was especially popular in the United States. German submarines were sinking passenger vessels and British warships were illegally seizing American vessels in an attempt to maintain a blockade of German ports. Most people in the western part of the the countrywanted no part of the war.

Two events in 1916 set the stage for the American Club. First, the U.K. imposed economic sanctions on Germany and extended them to neutral vessels. As a result, the British Clubs sent notices to all of their members in January 1916 informing them that no claims would be paid:

  1. if the vessel at the time the claim arose carried goods destined for the use of a British enemy;
  2. where the cargo on board the vessel was consigned to a British enemy subject whether or not the enemy consignee was carrying on business in a neutral state;
  3. where the direct or ulterior object of the voyage would, if the steamer were British, violate any U.K. law concerning trading with a British enemy; or
  4. where any financial interest or control in the vessel was vested in British enemy subjects.

Then, Germany announced on May 10, 1916 that its submarines would no longer attack neutral vessels, making it possible for American shipowners to resume trading with Germany. American shipowners who were insured by the British Clubs could nottake advantage of this opportunity. As a result, a number of American shipowners asked Johnson & Higgins to organize and manage an American Club to be operated along the lines of the British and Norwegian Clubs.

On January 11, 1917, Johnson & Higgins sent a letter to all American shipowners asking if they were willing to become members of an American Club. The response was said to be "immediate and positive".

Following the enactment of enabling legislation by the State of New York, the American Club was incorporated on February 14, 1917. Thirty-five shipowners applied for membership. The Club commenced operations on February 20, 1917 with 299 vessels and 1,105,021 entered tons. Larger members included American Hawaiian S.S. Co., Associated Oil Co., Clyde SS Co., Elders & Fyffes, Ltd., W.R. Grace & Co., Mallory SS Co., Munson SS Line, New York & Cuba Mail SS Co., New York &Porto Rico SS Co., Pacific Coast Co., Southern Pacific Co., The Texas Co., The Tidewater Co., and United Fruit Company. The United States Shipping Board also entered its vessels in the Club, and by the end of the war, there were 4,000 ocean-going ships entered.

The rules, conditions and terms of entry substantially followed those of the London Club, in which a large amount of American tonnage had been entered prior to 1917. Policy years ran from the 20th of February, as was the custom in London. Assessments were levied on the basis of contributing tonnage (an assessment of risk) as opposed to the modern practice of levying a uniform assessment on assessable premium. See Turner v. American Steamship Owners Mutual P&I Ass'n, 16 F.2d 707, 1927 AMC 337 (5th Cir. 1927).

The London Club reinsured the American Club on a quota share basis from 1917-1924.

Whatever their motives for founding the American Club, few, if any, American shipowners traded with Germany until after the Armistice. Germany announced the resumption of unrestricted submarine warfare on January 31, 1917. The United States broke off diplomatic relations with Germany on February 3. German submarines made direct attacks on American merchant ships, sinking three on March 15. Outraged by the German submarine campaign, President Wilson asked Congress to declare war on Germany, which it did on April 6, 1917.

American shipowners may have done little business with Germany in 1917 and 1918, but they had their own P&I Club, and Johnson & Higgins had a contract to manage the Club for ten years. Shipowners Claims Bureau, Inc. (SCB) was formed at the conclusion of that ten-year period in 1927 and has managed the Club ever since.

[Much of this information was preserved by Chris Williamson, longtime President of SCB, who wrote an account of the founding of the American Club for its 50th anniversary in 1967. Williamson joined Johnson & Higgins in 1926, and served as President of SCB from 1945 until 1971. Williamson, perhaps not wishing to offend anyone at Johnson & Higgins, did not acknowledge that world events were overtaking J&H and American shipowners even as they incorporated the American Club on February 14, 1917. But he was from another era, and besides, J&H is gone. See, Barbara Tuchman, The Zimmermann Telegram, (Ballantine Books, 1958); and John Keegan, The First World War, (New York: Random House, 1998), pp. 351-52.]

Business reverted to the UK

By 1926, most of the American fleets had returned to the British Clubs, who undercut the American Club's rates to get the business back. In 1927, J&H formed SCB in an effort to persuade other American brokers to do business with the American Club. The American Club's efforts to get new business were also frustrated by an understanding concerning rates between the British Clubs and Continental Insurance. Despite the strenuous efforts of Jocelyn Evans, then president of SCB (Loines had died in 1922), the British Clubs would not include the American Club in their agreement concerning rates.

Charles Kurz, a wealthy Philadelphian, entered his ships in the Club around 1938, beginning a long relationship between his family and the American Club, which lasted until 1998. Mr. Kurz, his son, A.B. Kurz, and his grandson, Charles Kurz II, all served as chairmen of the Club.


The American Club had very little mutual business from 1942-1946 because most American ships were time chartered to the War Shipping Administration and insured under a quota share arrangement among Fulton P&I, MOAC, the American Club, and the Hartford. The Club's Rules gave way to a policy form similar to SP-23, and the policy years were synchronised withcalendar years.

The WSA liabilities were commuted by the Maritime Administration in the 1950's, which means that most seamen's asbestosis claims dating to WWII are the government's responsibility.


During this very conservative period in the history of American business, the president of SCB, Chris Williamson, and the chairman of the Club, A.B. Kurz, made few changes to the way the Club operated and did little to attract new business. The Club did not accept any direct business,would only quote to American brokers, applied the pay-to-be-paid principle strictly, and kept policy years open for as long as ten years. Most of the members had their own claims staff and did not look to the Club's manager for claims service.

Almost all of the business came through J&H. Other brokers, such as Marsh, A&A and Fred S. James, kept their clients away from the Club. The four largest members, American President Lines, Farrell Lines, Keystone Shipping, and Prudential Lines, made up most of the Club's business. Two executives from each of these companies sat on the Board of the Club for many years.

The Bull Line bankruptcy created a major headache for the Club in the 1960's, leading to an influential decision on the pay-to-be-paid rule in 1969, Liman v. American Steamship Owners Mutual P&I Assn, (2d Cir. 1969).


The Club very nearly stopped underwriting after the 1971 policy year. The decision was made to continue, however, and the policy year was changed to coincide with the London Group's renewal date of 20th February. Chris Williamson retired, and was succeeded as president of SCB by John H. Cassedy. When Cassedy was tapped to run J&H's reinsurance intermediary, Willcox, in 1981,thepresidency of SCB passed first to James Henry, and then to Thomas McGowan, but Cassedycontinued to play a significant roleas chairman of SCB until he retired around 1993.

Reinsurance was placed exclusively at Lloyd's (led by the Janson Green syndicate) and in the London market, butJanson Green would not reinsure The American Club for tanker pollution liabilities. As a result, all tankers entered in The American Club were also entered in the International Tanker Indemnity Association ("ITIA") until ITIA ceased underwriting in the 1990's.

American flag tankers in the protected North Slope oil trade (ARCO and Sohio) swelled the Club's tanker tonnage in the 1970's. With the demise of the British Clubs' Lakes Pool after the 1976 policy year (and after the sinking of the EDMUND FITZGERALD), most of the Great Lakes fleets joined the Club, although competition from Marsh & McLennan and other Clubs eventually took them away from J&H and the Club. McAllister Bros. became the Club's first tug & barge fleet in 1977. Netumar Lines became the first overseas member around 1981. Prudential Lines left the Club after the 1985 policy year, and declared bankruptcy in 1986.


Although two large and influential members of the American Waterway Operators joined the Club in 1986, the 1987 renewal was something of a watershed. Aggressive competition from International Group Clubs, principally Steamship Mutual and Gard, and difficult negotiations with Janson Green, forced the Club to seek protection (from competition and from high reinsurance rates) within the International Group.

The Club turned again to the London Club (LSSO) for reinsurance.

With the assistance of the International Group and its lawyers, the Club obtained a business review letter from the Reagan Justice Department winking at its participation in the IGA. (DOJ refused to comment on the IGA itself because of a longstanding policy against commenting on existing arrangements that might violate the antitrust laws.)

With protection from competition, and access to the IG's oil pollution reinsurance, the Club attracted a number of other American tug and barge operators who had not previously been members of P&I Clubs, especially after the EXXON VALDEZ spill in 1989. Others joined the Club after a purge of U.S. business by the Standard Club in 1990.

A U.S. bankruptcy judge entered a judgment for $66 million against the Club in the Prudential Lines bankruptcy, forcing the Club to litigate further questions concerning the "pay-to-be-paid" rule to the Second Circuit. In re Prudential Lines Bankruptcy, (2d Cir. )

Vision 2000

By 1994, consolidation in the tug and barge industry, and dissatisfaction in that sector with the Group's U.S. tanker voyage surcharge, had reduced the Club's tonnage and made it clear that a new direction was necessary. With the help of Mercer Management Consulting, the Club conducted a strategic planning initiative that culminated in the announcement of a new business strategy, Vision 2000. The keynote of Vision 2000 was "convergence"; the Club needed to attract business from outside the United States, andto do that, it had to become more like the other International Group Clubs with whom European and Asian shipowners were familiar.

Accordingly, in 1995, J&H and the Club jointly hired Joseph E.M. Hughes to be the new chairman of SCB. Hughes developed British-style marketing materials and annual reports, directed that the policy form be replaced with a Rule Book, and made numerous marketing trips to London and the Far East where he interested brokers in placing business with the Club. His efforts, helped by the difficulties faced by the Newcastle and Liverpool & London Clubs, bore fruit, and the Club was able to open an office in London to enable it to work more closely with the London brokers who had come to dominate the P&I market.

The Club's efforts (begun at the insistence of Charles Kurz II before Hughes was hired) to become a full member of the International Group (as opposed to a reinsured member) were finally rewarded when opposition from the Group's right wing folded in the face of increased scrutiny from the European Commission's Directorate of Competition.

J&H was merged into Marsh in 1997, and Marsh spun off SCB at the end of 2001. The fixed assets of SCB are now owned by the Club, and SCB itself is now effectively owned by members of the staff.


As of this writing, the Club has continued to grow, and established offices around the world. Less than 50% of the tonnage currently entered in the Club is managed from the United States.

Persons interested in more detail about the history of the Club should consult Richard Blodgett, The American Club: A Centennial History (CorporateHistory.net, 2016).