The club is not indicating quite how profitable it anticipates the year to February 2016 will be but in a pre-renewal report to members indicates a good result is in prospect.

The outlook for Steamship Mutual was moved up to positive by the Standard & Poor’s ratings agency last month, with the combined ratio forecast to be 95%, indicating a healthy underwriting profit.

The ‘A-’ rated club is not seeking a general increase at the renewal, which also points to a profitable outcome, albeit not on the scale of the $75m surplus rung up for the year to February 2015.

The club started the current policy year with a free reserve of $376m and an insured fleet of more than 120m gross tons.

In a pre-renewal report club senior manager, Gary Rynsard, says that free reserves are expected to show further growth, despite an upturn in claims and low investment returns.

“The encouraging fact is that the club’s entered tonnage is growing but at the same time the capital base is becoming stronger, two things that do not always go together,” says Rynsard. “This is being achieved by a combination of careful risk selection, close attention to individual member records and prudent investment strategy.”

A key factor in the profitability of the current year is that Steamship Mutual has been able to recover funds from earlier policy years, where claims reserves have proved to be too conservative.

The club is forecasting a 5.4% increase in owned tonnage for the year, with an extra 3.3m gross tons added during the first nine months.

Churn - the phenomenon of new tonnage subject to price competition between the clubs, being insured at lower rates than vessels scrapped or sold- continues to be an issue

But Steamship Mutual says the financial impact of churn is moderate, when compared to the amount of claims releases from earlier years.

The pre-renewal report says that notified attritional claims, identified as those with estimates below $250,000, are in line with the previous year.

But higher value claims are costing more, particularly those above the abatement threshold of $1.8m and up to the start of the pool at $9m.

Although the International Group clubs are expecting a reduction in their collective excess of loss reinsurance programme for next year, Steamship Mutual is sounding a note of caution, as a result of a claim from the 46,100-dwt handysize products carrier Alpine Eternity (built 2009) insured by the Britannia Club.

The vessel - not identified in the Steamship Mutual report - faces a claims of as much as $300m, as a result of hitting an Iranian offshore oil platform, although the incident is reserved at half this figure.

“This claim is likely to dampen the reinsurers' enthusiasm for reducing premiums on the first layer of the reinsurance contract,” notes the Steamship Mutual report.

Steamship Mutual concedes that it covered three of the ten claims, sufficiently large to be notified to the International Group claims pool.

These relate to the elderly, Jones Act 5,330-lane metre ro-ro El Faro (built 1975), which sank with the loss of 33 lives, and two much less significant incidents that are at this stage precautionary notifications.

These involve the 106,000-dwt tanker Pacific Bridge (built 2002), which damaged a tidal station at Shanghai and the 4,200-hp tug Peter F Gellatly (built 2008), which struck a New Jersey terminal, causing some pollution.