Protection and indemnity insurer Steamship Mutual has announced a significant upturn in tonnage and earnings ahead of the all-important 20 February policy renewal date.
Following a board meeting, the London-based club said it had added 3.9m gt in tonnage over the past year and the total owned and chartered tonnage now covered by the club had risen to 165m gt.
In the 11 months to 20 January, the insurer said it had earned a 5.5% investment return, which amounts to $58m before currency factors are taken into consideration.
Late last year, Steamship Mutual chief executive Stephen Martin told members they would receive a 7.5% return of premium if they renewed their policy this year.
However, the club said that although claims this year are better than forecast, it is still expecting to record an underwriting loss. It said that its combined ratio would be greater than 100%, which indicates claims costs and expenses are exceeding premium income.
Commenting on the claims upturn, Steamship Mutual said it is concerned over the trend in pool claims which it shares with other members of the International Group of P&I Clubs.
"Pool claims affecting all clubs in the International Group are at similar levels to those of in 2018 and 19, at the same point of development, and higher than in previous years. It is quite possible that this indicates an upward trend in the cost of claims in the pool," Steamship said.
A 7.5% general increase, also announced in October, is expected to address the underwriting deficit.
Renewal talks
Steamship Mutual chairman Armand Pohan said policy renewal negotiations were progressing “satisfactorily”.
“We welcome the club’s continued growth over the third quarter, reflecting Steamship’s financial strength and high levels of service,” he said.
“Nevertheless, claims are somewhat higher now than two years ago and at this renewal premium levels are being adjusted accordingly. The directors will in due course consider whether a further distribution of capital can be made.”
Following the UK’s withdrawal from the European Union, Steamship Mutual’s newly formed European Club will be underwriting its European business from Limassol, Cyprus. It will have the same level of cover, financial security and service as the London-based club.
