https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AAdvance_callDefinition:Advance call - Revision history2026-06-13T22:08:07ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Advance_call&diff=14225&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-14T15:53:51Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>📞 '''Advance call''' is a preliminary [[Definition:Premium | premium]] request issued by a [[Definition:Mutual insurance company | mutual insurer]], [[Definition:Protection and indemnity club (P&I club) | protection and indemnity (P&I) club]], or other member-funded insurance mechanism at the beginning of a policy period, representing each member's estimated share of anticipated [[Definition:Loss | losses]], [[Definition:Reinsurance | reinsurance]] costs, and operating expenses for the coming year. The concept is most closely associated with the [[Definition:Marine insurance | marine insurance]] market, particularly the P&I clubs that insure shipowners against third-party liabilities, where the advance call forms the primary funding vehicle for the club's annual operations. Rather than a fixed, non-adjustable premium, the advance call is an initial assessment that may be supplemented by additional or [[Definition:Supplementary call | supplementary calls]] if claims experience during the year exceeds projections.<br />
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⚙️ At the start of each policy year, the club's board or managing committee sets the advance call rate — typically expressed as a percentage of each entered vessel's insured tonnage or value — based on [[Definition:Actuarial | actuarial]] projections of expected claims, [[Definition:Reinsurance | reinsurance]] program costs, and anticipated administrative overheads. Members pay this amount in installments, usually quarterly, providing the club with working capital to meet claims as they arise. If the club's [[Definition:Claims experience | claims experience]] proves worse than anticipated, the board may levy a supplementary call on members to cover the shortfall, while a favorable year may result in a return of part of the advance call or a credit against the following year's assessment. This mechanism reflects the mutual principle: members collectively share the pool's risk, and the final cost to each member depends on the overall group experience rather than being fixed at inception.<br />
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🌍 The advance call system carries particular importance for the global shipping and marine insurance market, where the International Group of P&I Clubs — comprising thirteen principal clubs — insures the overwhelming majority of the world's ocean-going tonnage. For shipowners, the advance call represents a significant budgeting item, and the annual rate-setting process is closely watched as a barometer of the marine liability market's health. Beyond P&I clubs, similar advance-call or assessment-based mechanisms appear in other [[Definition:Mutual insurance company | mutual]] and [[Definition:Reciprocal exchange | reciprocal exchange]] structures across various jurisdictions, including certain [[Definition:Workers' compensation insurance | workers' compensation]] pools in the United States and mutual agricultural insurers in Europe. Understanding how advance calls work is essential for anyone involved in marine placements, mutual insurer governance, or the financial management of member-owned insurance vehicles.<br />
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'''Related concepts:'''<br />
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* [[Definition:Protection and indemnity club (P&I club)]]<br />
* [[Definition:Supplementary call]]<br />
* [[Definition:Mutual insurance company]]<br />
* [[Definition:Marine insurance]]<br />
* [[Definition:Advance premium]]<br />
* [[Definition:Assessment]]<br />
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