Inspired by the Tokyo Olympic Games, marine insurance broker Tysers has awarded protection and indemnity insurers gold, silver and bronze medals based on their recent financial performance.
Gard, Shipowners’ Club, Britannia P&I and Skuld all won gold medals as the star performers in the broker’s financial ratings in its annual review.
Shipowners’ Club is a new entry to the gold ranking since the last time Tysers carried out a similar survey in 2016, the year of the Rio de Janeiro Olympics.
The P&I specialist has shown the best underwriting performance out of all the mutuals in the past year with a combined ratio of 101%, indicating a marginal loss.
Tysers’ analysis shows Norway’s Gard stretched its lead over rivals with $887m in premium P&I income and $1.2bn in free reserves earned in the 2020/2021 policy year. That is more than double North P&I Club, its closest rival in terms of size.
Gard’s strong financial performance has allowed it to return premium to members, despite the difficult market. “No question, Gard again finish at the top of our gold medal table,” Tysers said.
The UK P&I Club, however, has slipped out of the gold ranking to a silver placing, along with Steamship Mutual, North P&I Club, Swedish Club and West of England.
The UK Club’s underwriting performance for the 2020/2021 policy year was the worst of the International Group of P&I Clubs, with a combined ratio of 150%.
Tysers said the UK Club is under pressure to raise premiums again to address its underwriting deficit.
“The P&I underwriting results in recent years show a clear need for remedial action and we expect the club will be looking for a sizeable general increase for 2022 on the back of this year’s 10%. Sadly, such action looks unavoidable if the club is to return to its gold medal status,” it commented.
Gold
- Gard
- Shipowners' Club
- Skuld
- Britannia P&I
Silver
- Steamship Mutual
- Swedish Club
- North P&I Club
- UK P&I Club
- West of England
Bronze
- Japan P&I Club
- Standard Club
- London P&I Club
- American Club
The growing Swedish Club, which recently won an A rating from S&P Global Ratings, has worked its way into the silver rankings from its 2016 bronze position.
The current bronzes go to London P&I Club, American Club, Japan P&I Club and Standard Club.
Standard Club, which recently separated from manager Charles Taylor, is by far the largest of the bronze clubs.
Tysers is concerned about a $100m decline in Standard’s free reserves since 2018, adding: “The club has a lot of work to do to regain market confidence, and with only three years to the next Olympics, may struggle to move out of its current bronze medal position.”
Over the past two policy years, P&I clubs have been hit by a run of costly claims under the International Group’s pooled claims system. Tysers believes that pool claims in the 2020/2021 policy year could eventually turn out to be the worst ever, at more than $700m.
In response, clubs have been raising rates and Tysers said there could be even higher increases in store at the February 2022 renewal.
“With pool claims in 2021 continuing at high levels and with S&P [Global Ratings] placing half the International Group on negative outlook due to concern at underwriting results and pressure on capital, we must expect a very difficult 2022 renewal, with general increases well above the levels experienced in the last five years,” it said.
Tysers has been the subject of speculation that it might be the next takeover target as part of the consolidation of the speciality insurance market. Marine insurance is the largest sector in Tysers’ business.
Meanwhile, Tysers has taken on Zodiac Maritime head of legal & insurance Diana Sailor.
Sailor was previously at Steamship Mutual and London law firms Stephenson Harwood and Thomas Cooper Law. Tysers said: "We are confident that her vast experience will add an ever-greater depth to our offering."
