The American Club will not apply a general increase in premiums to all members at the upcoming renewal but will instead place an emphasis on individual member’s performance when pricing risk.
The move comes in response to an increase in claims which the American Club said necessitated an “increase in pricing for risk in 2020.”
The American Club said: “Members’ premium rating and terms of entry for the forthcoming year will be calibrated to their own particular circumstances, including their loss records, vessel-type, trade and regional factors, as well as other relevant matters, including the assessment of members’ individual risk profiles.”
“This approach allows for a more member-specific treatment of pricing and terms of cover. However, to embrace the more hostile trends developing in the claims environment, and a possibly less benign investment climate going forward, your board expects to see a year-on-year increase in the pricing of risk for 2020 of a magnitude which properly reflects future exposures. This intended adjustment upward will embrace not only the need for cash rises but also, as individual cases might demand changes in deductibles and or other terms of entry.”
On a more positive note, the American Club pointed out its investment portfolio showed a 9% year on year increase in returns. It said its recently acquired hull and machinery arm Hellenic Hull is now turning in a profit while its diversification into the fixed premium market continues to grow.
However, American Club members will be asked for a supplementary call to cover some of its previous policy years.
Members will be asked for an additional 22.5% of estimated total premium in the 2016 policy year and 17.5% for 2017.
The American Club said it wanted to “strengthen its financial position.” It said the two years for which a supplementary call would apply were “financially challenged by the untypically adverse recent development of certain large claims, both for the club’s own account and within the (International Group) pool.”
