Protection and indemnity insurer Steamship Mutual has reported an underwriting loss for the 2020 policy year.
The London-based mutual said its combined ratio, which reflects the balance of premium income and expenses, was 125.4% compared to a marginally profitable 99.8% in the previous year. A combined ratio over 100% represents a loss.
Over the last six years, Steamship Mutual’s combined ratio has averaged 99.2%.
Chairman Armand Pohan said the insurer is aiming to break even on its underwriting performance.
“The objective, so far as the combined ratio is concerned, is to achieve underwriting balance in each financial year,” he said.
Steamship Mutual blamed the underwriting losses on Covid-19 related claims and a record level of International Group of P&I Clubs pool claims.
Steamship Mutual made up for the underwriting loss through a 4.8% investment return, which earned $54.2m. Thanks to the investment income its free reserves declined only marginally to $511m in the policy year ending 20 February, down from $515m in 2019.
Steamship Mutual said it achieved a 4.5% increase in premium at the February policy renewal after asking members for a 5% general increase to help improve its underwriting performance.
Brokers noted Steamship Mutual was one of the more active clubs in taking on new tonnage at the recent policy renewal.
The club said it added 5.7m tonnes of new tonnage mostly from Greece, Japan, Singapore, Cyprus, Germany, Hong Kong, Spain and United Arab Emirates.
