The Swedish Club is poised to offer another discount on protection and indemnity premiums in the wake of a profitable year.

The Gothenburg-based mutual is to discount current year P&I premiums by 5%, which is an increase on the 4% rebate offered last year.

The Swedish Club reported a bottom-line surplus of $22.7m for 2017, but that compares to $22.3m at the half-year stage, so it appears there was a flat second half to last year.

The half-year combined ratio of 94% deteriorated to 104% for the full year, so it is clear there was a second-half underwriting loss.

But the investment performance went in a favourable direction — the half-year return of 5.2% increased to 7.7% for the full year.

The free reserve rose from $195m to nearly $214m, with the discrepancy against the surplus reflecting the premium discount.

The figures reported to a meeting of the club’s shipowner directors in Shanghai was described as a “solid result” by managing director Lars Rhodin, who added that the mutual was “prepared and well positioned to take advantage of a stabilising market”.

The Swedish Club has calendar-year accounting, so is ahead of the mutuals working on a 20 February year in reporting a result.

However, TradeWinds reported a month ago that the Standard Club — with a 20 February year end — had indicated a profit of around $30m was in prospect in staff briefings. This would lift its free reserve to about $460m.

The Swedish Club, which is both a P&I and hull insurer, had its outlook raised to positive by the Standard & Poor’s ratings agency earlier this year, which pointed to at least a satisfactory result being in prospect.

S&P also anticipated that the Swedish Club, which has a BBB+ rating, should be able to continue to discount premiums while increasing its financial strength.

The February 2018 renewal was the third where the Swedish Club had not sought a general increase for P&I cover.

Rhodin linked the decision to implement no general increase on the quality of the club's members and the premium discount to the mutual’s financial strength.

There was a single Swedish Club casualty, costly enough to be pooled with the other International Group clubs last year.

This arose from the grounding of the 45,709-dwt product carrier Chang Hang Tan Suo (built 2006) off Guangzhou, China, during Typhoon Hato last August.

Historically, the 145-year-old Swedish Club was mainly a hull insurer but it now emphasises its P&I operation, reflecting the long-term difficulty of achieving satisfactory premiums in the highly competitive hull market.

The club insures an owned fleet of more than 51 million gt for P&I, with the total book rising to over 91 million gt with charterers’ tonnage.

The hull book covers 2,761 vessels of nearly 112 million gt, with a total insured value of $9.5bn. On average, the Swedish Club takes 12.1% of the risk.