American Club chief executive Joe Hughes will have been running the protection and indemnity mutual for 25 years come August.
The Covid-19 impact on New York means there will be muted celebrations to mark the occasion. But, as he looks back over the past quarter of a century, he reflects that the club is “completely unrecognisable from what it was 25 years ago”.
In that time, achieving membership of the International Group of P&I Clubs has put it among the sector's elite. Under Hughes' leadership, the addition of hull insurer American Hellenic Hull and fixed premium outfit Eagle Ocean Marine helped established it in all the main marine insurance sectors.
“Our ambition was to become a serious and well-respected player, and we have achieved that. We’ve added substantially to our insurance capability and added loss-prevention — something that we could not have foreseen 25 years ago,” he said.
Smaller, 'but we don't feel inferior'
“We are smaller than the other clubs, yes, but in terms of the underlying quality we certainly do not feel inferior.”
As the American Club has matured, other US dedicated marine providers, such as the American Hull Insurance Syndicate, have gone out of business.
It has been a difficult time for P&I clubs generally, with declining premiums and two difficult claims years.
All things considered, Hughes is satisfied with the club's 2019 policy year results. It achieved a 10% increase in average P&I rates per tonne, while a 10.6% investment income helped increase its free reserves by 20%.
American Hellenic Hull has begun to contribute positively to the American Club's earnings and is growing its premium base. Eagle Ocean Marine is running a cumulative combined ratio of less than 80%, indicating an underwriting profit.
Although the American Club had to make a supplementary call on members in the last policy year, Hughes hopes such a move can be avoided this year.
He admits the P&I industry still has a problem with low premium levels, but he is optimistic that investment income is close to fully recovering from a fall earlier this year.
